Higher broadband speed hinted would raise Egypt’s GDP

Egypt’s broadband speed, if quadrupled, has the potential to contribute an extra 0.6 percent to the country’s gross domestic product, GDP, according to a study.

While doubling Egypt’s broadband speed would lead to a 0.3 percent rise in the GDP – to nearly $689 million — by quadrupling speed, the GDP would rise to around $1.4 billion, or 0.6 percent growth, the study by Technology giant Ericsson, Chalmers University of Technology and Arthur D. Little, an international management consulting firm, revealed.

Additional doublings of the Internet speed also has the potential to yield corresponding GDP growth stimuli, according to the study.

Analysts say broadband has come out as important economic growth stimuli even as the society evolves from an ‘Information Society’ to a ‘Networked Society,’ as referred by Ericsson.

There were 4.430 million broadband users recorded in the country as of 2011, with the number projected to rise by 3.84 million to 8.276 million users in 2016, notes Business Monitor International (BMI), an analyst firm, says AmeInfo.

“There is no doubt in my mind that Broadband, whether mobile or fixed-line, is a vehicle for economic growth, innovation and productivity,” commented said Anders Lindblad, president, Ericsson Region Middle East and North Africa — as quoted by Ameinfo.

The Egyptian government alongside the telecom operators recognise the value of broadband as reflected in the collective efforts to attain higher Internet penetration in the country, he added.

In 2012, Ericsson and Arthur D. Little reported that a GDP increase of 1 percent would be witnessed for every 10 percentage point increases in broadband penetration.

The said growth originates from a blend of direct and indirect effects, which offer a short to medium term stimulus to the economy. Others include induced effects, which involves the creation of new businesses and business products, the most sustainable dimension that could represent close to one-third of the aforementioned GDP growth.

The study, the first of its kind, quantifies the economic effects resulting from broadband speed in a “comprehensive scientific method using publicly available data.”

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