 | Issue: | Global-ICT 2007 |
| Article no.: | 14 | |
| Topic: | Influence of ICT on national and global development | |
| Author: | Rudolf Fischer | |
| Title: | CEO, Telekom Austria, and Vice Chairman, Telekom Austria Group | |
| Organisation: | Telekom Austria, Telekom Austria Group | |
| PDF size: | 216KB |
About author
Rudolf Fischer is the CEO of Telekom Austria. He is also the Vice Chairman of the Management Board of the Telekom Austria Group. Prior to Telecom Austria, Mr Fischer served as the President of LTOA, an association of local telecommunications operators in Hungary. Mr Fischer, previously, was the Chairman of the Board of United Telecom Investment B.V. in the Netherlands and, earlier, headed AOSA, a joint venture between Siemens AG and Alcatel Austria. Mr Fischer began his career at Alcatel Austria, where he rose to head the position of Controller. Rudolf Fischer is a graduate of the Vienna University of Economics and Business Administration.
Article abstract
The Internet drives the economy and the economy demands rapidly increasing amounts of bandwidth to fuel Internet growth. New uses of the Web, such as YouTube, digital cameras and amateur content, create enormous quantities of data. Radio, cable and other TV transmissions produce a total of 75 petabytes (75 x 1015) of data a year; YouTube, alone, streamed the same data volume in three months. There is an urgent need for investment to build the infrastructure with the needed capacity.
Full Article
Information and communications technologies (ICT) are already playing a significant role in the development of global society. More than six per cent of the world’s GDP, i.e. €2,027 billion, is directly attributable to ICT. In Western Europe alone, ICT and related branches of industry account for more than EUR 1,000 billion. According to OECD (Organisation for Economic Co-operation and Development) experts, more than half of global economic growth is due to ICT and there is a direct correlation between ICT investments and higher economic growth rates. In the Scandinavian countries such as Denmark and Sweden, where yearly ICT investments per capita range between €2,422 and €2,455, ICT contribution to economic growth amounts to 0.7 percentage points. In Austria as well, 0.35 percentage points of economic growth are attributed to this sector. Information and communications technologies represent a central source of innovation and competition and act as enablers of technological progress in other disciplines, such as nanotechnology and biotechnology. Moreover, ICT has a massive influence on employment. In Austria, 126,000 persons, almost four per cent of total employees, are working in the ICT sector. Besides the high rate of employment in the sector, the number of ICT users needed in the business world will play a significant role driving future employment. According to OECD estimates, almost 27.7 per cent of total employees in the UK, which ranks among the most advanced ICT markets in Europe, were ICT users in 2003. In Austria, this figure is only 17.2 per cent, so there is good potential for a further increase, which can be achieved by providing full coverage for access to ICT, by the introduction of new and innovative services, and through higher investments in modern ICT infrastructure. Despite this leveraging effect of information and communications technologies, infrastructure is considered to be mainly power and energy supply, rail and road traffic and water provision. Too little consideration is attached to telecommunications in this context. In the past few years, the telecom sector has devoted considerable effort to raising public awareness about the importance to the economy and society of ICT, and to convincing decision-makers of the necessity to intensify further expansion of modern ICT infrastructures. ICT services are as important as a well-functioning rail and road network. Any business location, any citizen and ultimately the entire economy reaps its benefits. The latest network developments such as Web 2.0 are already impacting many areas of the economy and of our lives. Social networks, for instance, offer a great opportunity to network beyond regional borders. Social networks enable for the first time the so-called ‘swarm creativity’, described by Peter A Gloor from MIT, of millions of people. This networked collective intelligence can achieve considerably more than any single individual or research lab can ever do. Consumers are increasingly producing ‘user generated content’. This was extensively analysed and experimented in a research project in Engerwitzdorf in Upper Austria. Citizens of this community create their own content and upload it on a multimedia platform – a broadband-based community TV called Buntes Fernsehen (colourful TV). Viewers can access this platform and choose the content they want to watch. The project has been running for three years and the citizens of Engerwitzdorf are very enthusiastic content producers. Associations, private individuals and local businesses are the main Buntes Fernsehen users. For years, the Canadian management professor Don Tapscott has been researching the ‘net generation’ – the generation born between 1978 and 1997. This is the first generation in the USA that grew up in a digital environment. They have interacted with mobile phones, play stations, television, MP3 players and the Internet since they were little. Tapscott is convinced that the net generation is able to process information more quickly – in a different way – and check products more critically than the previous generations. Moreover, this generation expects that products are adjusted and tailor-made to their individual tastes. Thus, digital productions, global networking and this new generation of critical consumers will bring about new ICT-based business models. These new developments already pose unprecedented challenges for ICT providers, who are faced with constantly rising data volumes. Technorati, one of the most popular search engines for blogs, is currently registering a doubling of the blogosphere every six months, which today is 60 times larger than when it started in 2003. Radio, cable and all other TV transmission technologies produce a total of 75 petabytes of data a year; a petabyte equals one quadrillion (1015) bytes. YouTube streamed the same data volume in only three months. The proliferation of digital cameras will soon generate five exabytes (an exabyte equals1018) or one quintillion bytes) of amateur content on a yearly basis. The same amount of content with HDTV quality generates 50 exabytes, which corresponds to a volume ten times larger than today’s total Internet traffic per year. However, videos are only one of a great variety of applications over the Web. Health, home services, gaming etc. will lead to a 100-fold increase in traffic volume or even more. The world’s largest Internet hub, the Amsterdam Internet Exchange (AMS-IX), registered a monthly rise in traffic of 7.4 per cent last year. Twenty per cent of all Internet traffic, Europe-wide, runs over AMS-IX. In October 2006, traffic volume amounted to two petabytes, which corresponds to one billion text pages. According to Global Internet Geography, international Internet traffic, overall, increased by almost 80 per cent from 2005 to 2006. However, total bandwidth expanded by only slightly more than 40 per cent. Therefore, one can anticipate that the need for bandwidth will grow considerably over the next years. Due to this development, not only ICT providers are faced with the pivotal question about which measures should be taken in future, but also the connection of each household and of each business is taking central stage. Austria’s largest infrastructure operator has invested approximately €700 million each year since 2000. The fixed net segment’s contribution accounts for one fourth of the industry’s total investments. Austria’s high-performance backbone network and its large-scale ADSL access network provide broadband service to roughly 95 per cent of the Austrian households. When the next-generation, all-IP network is completed between 2010 and 2012 the infrastructure will be ready for the latest generation of broadband services such as IPTV (TV via the Internet protocol) and VoIP (voice over IP) for the mass market. However, these new services should not shift the focus from pushing ahead with the rollout and use of communications networks in rural areas. Since information and communications technologies rapidly drive economic opportunity and social progress it is imperative to guarantee universal popular access to modern communications networks and to bridge the digital gap. Otherwise, we run the risk that the population will be divided between ‘connected’ and ‘not connected’. This can only be achieved through the creation of a framework that guarantees corporations investment-friendly conditions, which can partly compensate for the risks in investing in next-generation networks. A temporary easing of some regulations might, for example, serve this purpose. Given the drastically decreasing investments in the telecommunications industry throughout Europe – total investments more than halved from €102.2 billion in 2000 to €47.5 billion in 2004 – and in light of the intense infrastructure competition between traditional fixed networks, TV cable networks, mobile communication and WiMAX-based radio networks, the legitimate need for regulatory relief to stimulate investment seems obvious.
