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Arthur D. Little: Very High Broadband a Socio-Economic Necessity – Hungary Needs Further Investment Incentives, Urgent Actions Needed to Gain Momentum

The telecom industry, governments and regulators need to move decisively to fibre in order to support future economic growth, states Arthur D. Little (ADL) in its new report, “National Fibre Strategies: National economic imperative or just another private industry task?”

According to recent ADL studies, there are clear socio-economic benefits of high speed broadband infrastructure:

1) For every percentage point increase in broadband (BB) penetration the economic effect on GDP growth is around 0.1% of GDP

2) For every 1,000 additional BB users 80 jobs are created

3) Upgrading BB speeds for households leads to improved income of up to USD 322 i.e. HUF 71k.

Very High Broadband also drives diversification of economies, as Small and Medium Businesses are among the first to benefit from new services. These benefits however do not come cheap, as the investment needed for further rollout is vast.

“The challenge of how to attain the economic benefits of the latest fibre infrastructure while managing the considerable investment required is still unclear in many markets,” says Dr. Karim Taga, Global Leader of ADL’s TIME practice. “Hungary is struggling to manage this challenge and is losing momentum. Despite having been a pioneer with broadband deployment in the region, today it only accounts for 22% FTTH homes passed1. It is lagging behind CEE countries, which have successfully deployed nationwide fibre strategies, e.g. Lithuania (100%), Bulgaria (53%) and Slovakia (43%)1. Hence Hungary’s very high broadband strategy urgently requires re-consideration.”

In a global survey, ADL has identified five National fibre models that governments around the globe have been following to reap the benefits from fibre. ADL concluded that the most promising fibre strategies involve a hybrid approach, a combination of free market competition, government coordination and geographically-targeted public investment open to competitive bid. “Governments need to rethink their infrastructure strategies to catch up with global best practice examples,” adds Karim Taga. “Hence public policy must enable an investment friendly environment to secure Hungary’s future competitiveness by an accelerated roll-out of a nationwide very high broadband infrastructure. When done right, Hungary has the chance to become a role model in the EU with regards to Digital Agenda goals.”

To download the full report, please visit

1 FTTH penetration home passed, end 2012 - FTTH Council Europe

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