South Asia Experiences Double-Digit Mobile Growth, Greatly Expanded Use of ICT Services Since 2004

In Washington, D.C.:
Ian Larsen
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In Colombo, Sri Lanka:
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South Asia Experiences Double-Digit Mobile Growth, Greatly Expanded Use of ICT Services Since 2004

Region should work to close gap in overall ICT performance in order to experience ICT’s full development benefit, say report authors

Colombo, Sri Lanka, December 4, 2009— The South Asia region has experienced a significant expansion in the reach and use of ICT networks and services over the past decade but still lags behind many other countries in overall ICT performance, say World Bank Group experts convened in Sri Lanka for the South Asia regional launch of Information and Communications for Development 2009: Extending Reach and Increasing Impact (IC4D).

This regular publication of the World Bank Group addresses the critical role that information and communication technologies (ICT) play in economic development.  It found that regional improvements in ICT affordability in South Asia have led to 500 million new subscribers accessing telephone services and double digit growth in subscription to mobile telephone in each country in the region since 2004.

Globally, the report found that access to affordable, high quality internet and mobile phone services enables development across all levels of the economy and society.   In fact, for every 10 percentage-point increase in high speed Internet connections there is an increase in economic growth of 1.3 percentage points. The report also identifies the mobile platform as the single most powerful way to reach and deliver public and private services to hundreds of millions of people in remote and rural areas across the developing world.   

Broadband in particular plays an essential role in providing the basis for local IT services industries, which create youth employment, increase productivity and exports, and promote social inclusion. Report authors say that developing countries should seize this largely untapped opportunity, with less than 15 percent of the potential global market for IT services industries currently being exploited. In 2007, this market represented nearly US$500 billion.

In South Asia, reformed regulatory frameworks in the region now promote competition and private investment in the telecommunications sector.  The region has also become a strong player in the global information and innovation economy. While India’s success in the information technology (IT) and IT-enabled services (ITES) sectors is well known, Pakistan and Sri Lanka have also emerged as potential

destinations for offshore services. In addition, the use of ICT services continues to deepen, with governments across the region designing and implementing programs to both automate and transform public service delivery.

However, more needs to be done to realize the development impact of ICT in the region. The report gave each of the South Asian countries scores of 3 or 4 on a scale of 1-10 in overall ICT performance, a measure that includes access, affordability, and adoption. This is because more advanced ICT services such as the Internet and converged services are not yet widely available compared to other regions. Given the low income levels in South Asia, there is still room to improve affordability and expand the addressable market. The use of ICT by governments and in businesses will have to deepen to have a lasting impact on improved transparency and service delivery.

“These technologies offer tremendous opportunities.  Governments can work with the private sector to accelerate rollout of broadband networks, and to extend access to low-income consumers,” says Mohsen Khalil, World Bank Group Director for Global Information and Communication Technologies. “Governments should proactively encourage the development of local IT services industries through policies and incentives directed at entrepreneurs and the private sector, and through investments in skills and infrastructure.”

“Access to broadband completes the information foundation for a modern economy and should be a priority in national development plans.” says Katherine Sierra, World Bank Vice President for Sustainable Development. “Governments can play a key role in expanding broadband access by policies and incentives that encourage competition and private investment.”

The World Bank’s ICT Engagement in South Asia

The World Bank Group is the largest international donor in the field of ICT for development and supports ICT activities projects in over 100 countries with a portfolio amounting to more than US$3 billion.
In South Asia, the World Bank is actively engaged in supporting ICT sector development through self-standing ICT activities as described below, as well as through ICT components of sector programs in various sectors, including integrated financial management information systems, e-education, agriculture information systems, etc.

The World Bank has been involved across South Asia in a range of activities to help governments design and implement sector reforms, promote the IT and ITES industries, and strengthen e-services adoption. The International Finance Corporation (IFC) has also invested in private telecommunications and IT firms that have been strong performers. The following is a sample of on-going and potential engagements across the region.

Afghanistan GICT manages the Emergency Communications Development Project ($25 million) that has restored critical government communications and supports policy and regulatory capacity building, laying the foundations for strong sector growth. The Bank also provides technical assistance to regulator ATRA on issues related to universal service, radio spectrum, and Internet policy. IFC has made a $45 million investment in the third mobile license operator MTN.

Bangladesh The World Bank is assisting the Government to reform the telecommunications policy and regulatory environment to facilitate competition and private sector participation, and to restructure the incumbent operator into a public limited company. It is also providing technical assistance on stock-taking of the ICT sector, including in ITES and government use of ICT, mobile telephone-based payments, and in formalizing the Digital Bangladesh program. IFC has supported telecommunications firm Grameen Phone with senior debt and equity investments, and is looking at a potential investment in a broadband operator.

Bhutan  The World Bank provides regulatory technical assistance and capacity building support to the regulator BICMA on the regulation of backbone networks.

India GICT provides cross support to over 20 sector projects with ICT components in health, education, urban development, highways, irrigation, etc. The Bank is also preparing an e-Bharat Project, which will support the $5.5 billion National e-Government Program. In 2008, IFC made a $100 million loan to cellular operator Idea, and has previously invested $70 million in the operator Bharti Airtel. Between 2000 and 2009, IFC invested a total of $72 million in 13 IT firms.

Nepal The Nepal Telecom Sector Reform Project ($22 million) aims to strengthen the policy, legal, and regulatory environment to enable private sector participation, facilitate competition, and increase rural access to services. The World Bank is also developing an IT industry development plan, and is assessing community information centers. 

Pakistan The World Bank provides technical assistance support to the Federal Government’s Ministry of IT and Telecommunications on its universal service program, IT and ITES industry development and institutional arrangements for e-government.   GICT will support the Universal Service Fund Company in ensuring the effectiveness of its broadband program, and will assist the Provincial Government of Punjab in the design of its IT policy.

Sri Lanka The World Bank supports the implementation of the e-Lanka Project ($53 million), which aims to enhance growth and equity through improved access and use of ICT by citizens, businesses, and government. E-Lanka also supports the construction of a national backbone. Between 2009 and 2011, the Bank will also support capacity building at the regulator TRC to strengthen responses to convergence. IFC has invested $100 million in Dialog Telekom, now Sri Lanka's largest telecommunications company by market capitalization.

About the World Bank Group
The World Bank Group is one of the world’s largest sources of funding and knowledge for developing countries. It comprises five closely associated institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), which together form the World Bank; the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). Each institution plays a distinct role in the mission to fight poverty and improve living standards for people in the developing world. For more information, please visit www.worldbank.org, www.miga.org, and www.ifc.org.

About IC4D
IC4D is a regular publication of the World Bank Group addressing the critical role that information and communication technologies (ICT) play in economic development. It features at-a-glance tables for 150 economies of the latest available data on ICT sector performance.  The 2009 issue introduces performance measures for ICT access, affordability and applications in government and business. For more information visit www.worldbank.org/ic4d