Wednesday, September 18, 2019

Why CONNECTIVITY matters 

May 18. 2019
James Allan
James Allan
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By Asina Pornwasin
The Nation Weekend 

13,500 Viewed

CONTRIBUTION OF TELECOMMUNICATIONS TO ECONOMIC GROWTH HIGHLIGHTED IN STUDY

Telecommunications play an important role in modern economies, and developments in telecommunications networks have reflected the adoption of digital technologies throughout those economies.

A new Telenor Group-commissioned report outlines the impact of telecommunications on Thailand and Asia.

According to the study, called “The Mobile Effect: How Connectivity Enables Growth”, telecommunications is at the core of modern economies. Sectors that are intensive users of telecommunications generally contribute a greater proportion of gross value added (GVA) to those economies, and connectivity contributes to and enables social goods. 

“Our study quantified these impacts across the Asian countries where Telenor is active – Bangladesh, Pakistan, Myanmar, Malaysia and Thailand,” said James Allan, the director of Frontier Economics, which conducted the study.

The report found that sectors driven by telecommunications contributed almost three-quarters of the economic growth in markets across Telenor’s Asia footprint. 

Telecommunications provided direct benefits, social benefits and indirect benefits.

The sector’s direct contribution to the economy typically increases with that economy’s maturity. The contribution of telcos to Thailand’s growth is close to that of Malaysia and the OECD, at an average of 1.5 per cent.

Also, telecommunications is an enabler of economic growth. The economic contribution of telecom-intensive sectors in Telenor’s Asia footprint is between 65 and 75 per cent of GVA. In countries with substantial economic growth, the total GVA from telecommunications intensive sectors grew between 6 and 12 per cent per year from 2005 to 2015. 

For example, in both Thailand and Pakistan the GVA contribution of telecommunications intensive sectors almost doubled from around US$350-$400 billion (Bt11.1–Bt12.6 trillion) in 2005 to almost $700 billion (Bt22.2 trillion) in 2015.

The GVA of telecommunications intensive sectors has also grown rapidly on a per-capita basis, increasing at approximately 4 to 11 per cent per annum from 2005 to 2015. In this case, Malaysia and Thailand were the two standout countries, where per capita GVA is between 2 and 5 times higher than in other countries. This is likely due to the more developed nature of the two economies, which translates into higher levels of economic growth and productive efficiency.

Telecommunications technology and the internet, in particular, have changed the ways in which people live, work and interact with others and their environment. Access to telecommunications services has created substantial economic benefits for users and society. 

Telecom services can also help promote social benefits, including in healthcare, social inclusion, financial inclusion and agricultural 

productivity.

Telecommunications have enabled the use of digital communication technologies to deliver medical care, health education, public health services and health insurance at a distance. 

Telecommunications have facilitated enhanced social participation, especially for people with various disabilities. Mobile technologies play a significant role in improving social inclusion. In Pakistan, for example, mobile apps encouraging social inclusion for the disabled include the “Tell Me” voice-guided app that helps visually impaired people navigate their surroundings, and the “Roll Out” app, which shares restaurants and hotels that cater to mentally and physically challenged people. 

Telecommunications have enhanced access to basic financial services, particularly facilitating the collection of financial documents, the acceptance and disbursal of cash, the monitoring of loans, receipting and sending of remittances.

The most substantial impact has been seen in Bangladesh and Thailand where from 2014 to 2017, the percentage of people who made or received digital payments grew from 7 per cent to 34 per cent and from 33 per cent to 62 per cent respectively, and the percentage of people who held a mobile wallet grew from 3 per cent to 21 per cent and from 1 per cent to 8 per cent respectively. 

That use of digital payments and mobile wallet accounts by people living in rural areas is comparable to the overall population in each country. Mobile financial services are helping to reduce the financial inclusion divide between urban and rural populations.

Moreover, telecommunications help to improve productivity, profitability, food security and employment in the agricultural sector. 

The usage of telecommunications in agriculture helps in achieving such goals as spreading agricultural best practices, disaster management and early warning, enhanced market access, food safety and traceability, financial inclusion and implementing regulations. 

Hakon Bruaset Kjol, the Telenor Group’s senior vice president of partner and external relations for Asia, said that due to its presence in Asia for more than 20 years, Telenor has connected 166 million people and brought $4.3 billion in economic value to its Asian markets in 2017. Meeting these connectivity demands requires significant investment, especially in networks, from the telecommunications players across Asia. 

From 2014 to 2017, Telenor invested $6.2 billion in its five Asian markets, making the company one of the top three foreign investors.

In Thailand, Telenor has played an important role in using mobile technology to equip farmers with the tools they need to face challenges such as climate change, plant disease and soil moisture, Kjol noted.

In October 2018, Telenor’s DTAC arm launched its new “Farm Man Yum” service, a precision farming app that analyses various data sets from involved farms to resolve issues in a timely manner. 

The service was designed to meet the needs of farmers who were reliant on precise weather forecasts to manage and plan their cultivation, increase yields and cut costs. The service incorporates personalised weather forecasts, which show area-specific data on an hourly basis including temperature, the likelihood of rainfall and the amount of rainfall.

 It can also provide a seven-day forecast with the highest plot-specific precision available in Thailand. With the help of satellite imagery, the feature helps farmers to views aerial shots of their plots to locate irregularities and unhealthy plants. Finally, a Personal Assistant Service helps farmers understand and efficiently plan cultivation in each crop year with easy-to-understand infographics based on academic data from Kasetsart University’s Faculty of Agriculture lecturers.

Alexandra Reich, the chief executive officer of DTAC, said that innovation and investment by mobile network operators have contributed considerably to the social and economic growth of Asia and Thailand. 

The mobile ecosystem, led by operators, will continue to address the barriers that prevent underserved people from gaining access to the mobile internet, especially women and low income people, as well as rural and youth communities. In the 5G era, mobile technology development will continue to have a profound and transformative impact on the world, said Reich.

Mobile connectivity has had a profound impact on society, chalking up many benefits in health, productivity and education.

Data-hungry consumers

“From the perspective of the telecom industry, what an incredible market to be in!” said Reich. “Thais consume a lot of data, more than many European countries in fact. 

“I haven’t been here for a full year yet, and I’m still very much in the honeymoon period. I just love Thai people, their sense of family, their respect, their appreciation for the good life.” Thailand ranks in the Top 10 countries for usage on several social media platforms, including Youtube. Thais are also very demanding and knowledgeable about their mobile connectivity, she said.

“A lot of people here actually know what ‘spectrum’ is. I can tell you that in Europe, very few people care about or understand some of the things Thai consumers know very well,” said Reich. 

Not only are Thais heavy and demanding users, they are also creative users, she said. When Instagram and Facebook launched in Thailand, entrepreneurial Thais immediately took these platforms and transformed them into e-commerce platforms. Shopping on Instagram was a thing in Thailand long before Instagram added shopping to its features. In fact, Thailand is where key new features in Facebook are often first tested out before being rolled out to other markets.

The DTAC NET Arsa programme has trained one million low-income earners on how to use social media accounts to generate new sources of income from their products. And its Farmer Info app has reached 120,000 smallholders, putting high-resolution images of their farms and hyper-local weather forecasts in the palm of their hand.

Mobile network operators have been a driving force behind the innovation and investment needed for these opportunities. 

The company has contributed considerably to the social and economic growth of Asia and Thailand, said Reich.

“Today, we are once again at the centre of a technological leap forward. Thailand can greatly benefit from 5G’s mobile technologies. But 5G will not be built like previous mobile technologies. Our role as a telco will be to coordinate the various industry players needed to build viable use cases for 5G, which have yet to materialise as of now,” said Reich.

It is therefore an important time to take a full measure of why connectivity matters and what it can do for society, she said.

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