world wide dsl penetration

Thursday 19 July, 2007

Numbers Need More Precision
Countries may be closer than they appear in the rankings
Key Takeaway: Most countries are much closer together than the rankings suggest
Shara Evans’s remarkable labor of love is a 60 page report that looks deeply at how the broadband statistics are derived internationally. The handful of us who care about the details of the numbers will spend hours pouring over the analysis. Most interesting to everyone else is her discussion of “bands” – a set of nations essentially so close that they are identical even if one is ranked 4th and another 8th. There’s no simple test for the “margin of error” in data compiled from many sources, but clearly differences of a few percentage points could be data errors rather than actual results.

mm comment: statistics may lie, but the bigger issue is getting quality data across borders that is comparable. I also think we need more data. To look @ these general #’s out of context leaves something to be desired.

The OECD figures are carefully collected and sensibly analyzed. In general, they are highly accurate. In particular, I have looked several times over the years at individual numbers in the OECD tables I had reason to doubt, and confirmed them. However, Evans found reputable data sources in many of the countries with substantially different figures than the OECD, both higher and lower. Few countries have totally accurate official record collection, with definitions, dates and accuracy varying between the different sources. Some countries effectively separate business from residential figures, but other make arbitrary or no differentiation.

An extreme example of bad data from reputable sources is the Pew Study. This respected non-profit contacted 3,000 U.S. adults and claimed “the margin of error on the overall sample is +/- 2%.” They however had a massive error, claiming “As of March 2006, DSL connections constitute half (50%) of all home broadband connections and cable modems have a 41% share.” In fact, the cable share was then about 5 points higher than DSL, based on the audited financial statements of the companies filed with the SEC. Errors that large are rare, but available figures should be presumed precise to 1%, and errors of 5 points are certainly possible. (I have no clue on why Pew was so far off, only some of which is a high count of wireless. I hope they go back and check.)

I’ve long suspected that Beijing figures did not include many apartment complexes that were wired for 10 to 100 megabits by the builder. I’ve recently heard from Russia that similar “building provided” broadband is a very large factor not in the government count.

This study (and others less reputable) is already being abused to pretend that real policy failures are simply misinterpreted data. Korea, Singapore, Hong Kong and most of Scandinavia are well ahead. Canada, Taiwan and Switzerland are doing well. The U.S., UK, and Australia are significantly behind. Spain, Germany, and Italy have even lower penetration.

In Shara’s spirit, here’s a banded ordering based on households rather than population, using Point-Topic’s Global Broadband statistics. Point-Topic (like OECD) offers an highly accurate data set. P-T gives household as well as population rankings, which the OECD has avoided because the count of “households” is notoriously hard to pin down. Rankings by populations are generally similar, however.

Banded Country Ranking, by households

Band 1 Proving what’s possible
South Korea 89%
Hong Kong 84%
Iceland 76%

mm comment: note each of these countries has a highly dense population concentrated in 1 major urban center.

Band 2 Doing well
Netherlands 71%
Denmark 70%
Singapore 70%
Israel 69%
Switzerland 67%

mm comment: all of these countries are small, with populations concentrated in just a few cities. Is it fair to compare the vast US with such vastly different countries?

Band 3 Not embarrassing
Canada 62%
Taiwan 61%
Norway 60%
Finland 59%
France 56%
Japan 54%

mm comment: what’s amazing here is that countries like Canada, France, & Japan, with large land areas, have achieved such high penetration. I do think France’s earlier Minitel system gave them a predisposition to the internet.

Band 4 Muddling

UK 52%
Belgium 52%
Sweden 52%
Estonia 50%
USA 50%
Australia 50%

mm comment: if we could examine breakdowns of urban/rural, or broadband internet users as % of telephone &/or cable users, I think each would tell us a lot more about broadband penetration in large countries. I don’t know what it means, but interestingly, English-speaking countries do seem to be bunched together here.

Band 5 Disappointing
Spain 46%
Ireland 43%
Portugal 42%
Austria 42%
Slovenia 40%
Italy 39%
Germany 38%
New Zealand 34%

mm comment: A cultural context has to be taken into account as well. The big mediteranean countries are typically technology laggards. While the deutsch-sprecher (german-speakers) are tech savvy, they rarely jump on the bandwagon early on.

I have an item I held over explaining some of these numbers. Martin’s comment rural areas are lower was suggestive, because rural areas are also poor. The U.S. with a Gini coefficient of 45 has more relative poverty than any other developed country, which is a thoroughly unattractive explanation of why reason we are behind. In affluent countries like this, the key variable explaining take rate is price, which explains 50-80% of the differences. Price in turn is largely a function of competition – more than four (Korea, Japan, France) produces leaders, duopolies like the U.S. generally fall behind, and countries close to monopoly (Spain, Italy, and Germany until recently) have the worst results.

-dsl prime


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