PLUM CONSULTING FIND NO EVIDENCE THAT GOVTS CAN DRIVE BROADBAND TAKE-UP

Plum Consulting presented the results of their research (commissioned by Vodafone), into the role of Governments using demand-side measures to support broadband take-up, to a meeting of the Broadband Stakeholder Group last night. They looked at broadband take-up in several countries - Europe, US and Korea – and age and educational factors, and identified substantial variations between them. However when they looked at specific government interventions – such as Spain spending €6bn in internet education – they found that the increase in take-up was indistinguishable from that which would have happened anyway. Increases in take-up in older groups was simply a “cohort effect”- people getting older.

One of the problems the researchers faced was that few of the interventions were structured to provide post-hoc review of their effect (particularly against the counter-factual of expected growth anyway). So Plum’s main recommendation was that if Government wanted to drive take-up it should conduct small scale trials, structured in a way to provide such sound information into their effectiveness.

In their view, the most significant factor in driving higher take-up was educational levels. Korea provided a good example of this where the older groups, who had been educated when Korea was relatively poor, showed below average take-up whilst the younger generations showed above average take-up.

Plum did explore the main causes and barriers to take-up. Broadband was seen by non-adopters as not relevant, expensive and complex. A positive “social infrastructure” – education, workplace usage, local language content – supported higher take-up.

Addressing these issues, Plum compared PC-based broadband with mobile broadband platforms such as iPad. They concluded that mobile broadband would drive greater take-up as it was application-led (improving relevance), much easier to use (no file structure, faster, easier updates) and could be supported by pre-pay options (getting round credit card issues). The reader might like to recall, however, that the research was commissioned by Vodafone.

In the Q&A session, some people questioned whether mobile was an appropriate platform for services like completing your tax return or accessing medical records. It seems clear that different platforms offer different advantages and that they will be used in different ways.

Whether putting Government services online would drive take-up was raised. The general view was that it would not, as closing down offline options would too badly disadvantage those groups of non-adopters who might specifically need those services.

I think a more significant effect would be internet on the TV set. The TV is almost universally adopted and easy to use; the fastest growth in internet applications requiring broadband is in iPlayer and other on-demand TV services, YouTube and Facebook – ie video-based services. So it seems inevitable that once TV sets with internet access built in become available - with a simplified browser replacing the EPG - that broadband take-up will accelerate dramatically. Current internet applications then in effect replace Teletext. Of course that might show up that the question was not what it appeared – it is not broadband take-up per se that is the concern, but use of online services to help Government reduce costs.

You can read Plum's account of the research from page 31 of the document at
http://www.plumconsulting.co.uk/pdfs/Plum_March09_Demand-side_measures_to_stimulate_Internet_and_broadband_take-up.pdf