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Fast broadband is worth R1 177 a month

We know that broadband internet access is expensive in South Africa, but here’s something to think about. According to a new study published it might just pay for itself – even at our inflated prices. It says that upgrading from 4Mbps to just 8Mbps puts a whopping R1177 a month into a household’s coffers for people living in developed nations, while those in emerging markets can expect to see R451 back in their monthly budgets by upgrading from 0.5Mbps to 4Mbps.

The study, conducted by a team from Arthur D Little analysts with Chalmers University of Technology in Sweden, will form part of the Broadband Commission State of Broadband Report, which is published annually in the US. It surveyed 19 000 households in the UK, France, Germany, Italy, Sweden, Spain, Japan, the USA, Brazil, India and China. It was sponsored by networking company Ericsson – which might give rise to some scepticism – and the figures are adjusted for Purchasing Power Parity (PPP).

The higher a country’s GDP, the report found, the higher the return on internet subscriptions. This isn’t too surprising as more developed countries have more ways to save money online, such as streaming TV, online shopping and so on. The report however, focusses on increases in household income and says that there’s a direct correlation between access speed and earnings.

Several previous studies have shown that broadband enables people to become more informed, better educated, and enriched – ultimately leading to a faster career path. However as ICT maturity increases, participants without broadband or with slow broadband at home will find it harder to stay competitive in the labour market – reducing their chances of finding a job and building capital. The level of broadband speed required to gain a competitive advantage in the labour market is likely to be raised over time.

While returns are greater in rich economies, however, going from no internet access to a 512Kbps connection in a developing nation is worth R7 849 a year. That’s still a positive return on the average price of about R350 a month for a 1Mbps uncapped connection here.

(Hat tip – The Guardian)

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