Achieving gigabit connectivity in the Eastern partner countries

  • Date: 28/04/21
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The COVID-19 pandemic has made the need for digital connectivity and access to digital services clear. 

Research conducted by the World Bank found that about half of surveyed firms responded to the pandemic crisis by using digital technologies and digital solutions. Similarly, people have switched where possible to online modes of shopping, working, and socialisation. For example, online video conferencing platforms such as Zoom saw a thirty-fold increase in meeting participants daily between late 2019 and mid-2020. Even searches for ‘e-commerce’ on leading search engine Google saw a jump in early 2020, as most countries around the world began their lockdowns.

With the growing use of digital technologies and solutions, it is now more urgent for countries to overcome long-standing divides in access to connectivity. And due to the exponential increase of services and applications relying more on high-speed broadband connectivity, it will be critical for countries to accelerate internet access for everyone with no exclusion or discrimination. This will allow all people, businesses, and institutions to make a shift to digitisation in response to this pandemic, but also to set up for a resilient recovery and prepare for future shocks.

The European Union’s Gigabit Society targets point the way to a vision of such a connected society. It sets the stage for countries to work towards overcoming the income, location, demographic, and accessibility divides that have held many people back from accessing digital opportunities.

The World Bank worked closely with the European Commission, within the EU4Digital Initiative, to assist the Eastern Partnership (EaP) countries –Armenia, Azerbaijan, Belarus, Georgia, Moldova, and Ukraine – to develop and update their national broadband strategies and identify roadmaps to realise gigabit connectivity.

Gigabit broadband is possible in the EaP countries

The Eastern partner countries have done well to increase access to the internet for their populations: as of 2019, more than two-thirds of individuals were internet users. However, the findings of the analysis conducted by the World Bank suggest that most internet users, and certainly the better-connected ones, are in urban areas. Moreover, existing networks might not be capable of sustaining gigabit-level speeds: as Figure 1 shows, between a quarter to nine-tenths of households are not currently subscribed to fiber to the home (FTTH) technology, which is the likely networking technology to deliver such speeds. Fifth-generation (5G) networks, which could also deliver such quality, are only now being rolled out in these countries, suggesting a long way to meet those targets. 

However, these targets are attainable. Countries such as Singapore and the United Arab Emirates have seen FTTH networks cover most of their populations. Among larger countries, China has succeeded in connecting most of its households to FTTH. Countries such as Lithuania and Spain already register fixed broadband connection speeds over 100 Mbps. Each country’s path to a gigabit society will differ, but these examples suggests that the EaP countries have various good practices to define their roadmaps to get to gigabit connectivity for all.

Main ingredients for broadband-for-all

Indeed, global experience and good practices –embedded well into the European Union’s own practices and regulatory frameworks – highlight certain common themes that underpin well-functioning broadband markets. These include, most critically:

  • Increasing competitive pressure on service providers in different subsegments of the value chain – from first to last mile through markets or policy actions – to improve market outcomes for consumers;
  • Mobilising private investment to expand networks and improve quality of service, including through strategic use of public financing to de-risk private investment where necessary; and,
  • Empowering digital users to stimulate demand, build knowledge about productive uses of broadband, to increase digital inclusion, and to maximise economic impact.

Notably, enabling competitive markets and attracting private investment are critical elements for the EaP countries to release their gigabit connectivity potential. The investments needed to reach universal FTTH coverage are significant – in late 2020, we estimated that the level of investment needed to reach 100 per cent fiber coverage across the six EaP countries was between €4 to €14 billion. Much of this can be mobilised from private sources if enabling environments create the right incentives and pressures. Specific gaps that remain – where broadband rollout is commercially unlikely in a reasonable timeframe due to reasons of high-cost, low-revenue potential, or limited competition – could then be considered for some form of public financing or de-risking.

Parallel efforts to increase the value of broadband connectivity for people and businesses will expand markets. This could include digital literacy programmes, development of broadband use-cases that realise social and economic opportunities, and deeper digitisation of public and private services. 

Managing demand while closing divides

EaP countries can do more to mobilise private capital and close digital divides. This will need updating legal frameworks to increase competitive pressure in broadband markets, reduce the costs of broadband rollout, allow the rapid introduction of new technologies (such as 5G), and boost regulatory competence and independence. This will create the conditions to mobilise private capital. Complemented by targeted programmes to address remain gaps and divides through demand-side programmes, Eastern partner countries can firmly position themselves to build back better in the global digital economy.

Valeria Dessolis, Natalija Gelvanovska-Garcia, Juan Navas-Sabater, and Siddhartha Raja: March 2021

EU4Digital: Broadband Strategies in the EaP region – a project implemented by the World Bank