What is required for high-speed fixed internet?

Increasing high speed broadband penetration will create $10 billion growth and 500,000 jobs: Strategy& report.

“Accelerating Turkey’s high speed broadband internet penetration rate – which is currently 44% – to 85% by 2023 could increase GDP by a cumulative $130 billion and add create roughly 500,000 jobs as well as creating $10 billion growth in information and communication technologies sector.”

Accelerating Turkey’s high speed broadband internet penetration rate – which is currently 44 percent – to 85% by 2023 could increase GDP by a cumulative $130 billion and add create roughly half a million jobs as well as creating $10 billion growth in information and communication technologies sector, said Bahjat El-Darwiche, the leader of the Strategy& company’s Communications, Media, and Technology practice in the Middle East, while speaking at a press conference held in Istanbul on March 23.

“Accelerating Turkey’s high speed broadband internet penetration rate – which is currently 44 percent – to 85% by 2023 could increase GDP by a cumulative $130 billion and add create roughly half a million jobs as well as creating $10 billion growth in information and communication technologies sector,” said El-Darwiche during the release of “Accelerating High Speed Broadband Internet Penetration in Turkey” prepared by the Strategy&, a global strategy consulting firm, with support of Türk Telekom.

El-Darwiche said the main obstacle to increasing the high speed broadband internet penetration rate in Turkey is demand and supply gap.

Turkey’s current high-speed broadband coverage infrastructure rate is 66% while its high-speed broadband penetration rate remained only 13%, said El-Darwiche. “Despite the fact that the broadband coverage in Turkey stands at 42% of premises for ultra-fast internet, the rate of households that use ultra-fast internet remained only at 0.1%,” he said. Report reveals that solution to this problem with right method will contribute to the country’s economy.

The report cited three international models aimed at accelerating the high speed broadband internet penetration. These three models are as following: demand stimulation, infrastructure-based competition, and single infrastructure company model. The report said the best model for Turkey are practicing both models of demand stimulation and infrastructure-based competition. Stimulating demand and establishing infrastructure-based competition will enable extending the socio-economic benefits of broadband connection to the entire country.

‘Joint infrastructure model unsuitable for Turkey’
The report also said that the establishing single infrastructure company model is unsuitable for Turkey on the ground that there is no supply problem in the country. This model is seen suitable for countries where supply cannot meet the demand. Internet access penetration rate in Turkey is almost at the same levels of the European Union countries, said El-Darwiche. “In this respect, Turkey needs demand stimulation and expand of infrastructure through the infrastructure-based competition rather than establishing a joint infrastructure company. If the necessary steps are taken in line with these needs, then it will bring major socio-economic benefits for Turkey and reinforce its regional and global competitive positioning,” said El-Darwiche.

Highlights from the report
Turkey’s fixed broadband household penetration rate is still at 44% and it will reach to 60% as of 2023 under the current trend.  Under the right acceleration conditions, the Turkish high-speed fixed broadband market offers an opportunity to reach 85% household penetration by 2023. Operators’ share in fixed-line market is increasing.
Turkey’s rating in the HHI index decreased to 51% (down from 72% in 2010) in fixed broadband market. Low rates in HHI Index is an indicator of a fair competition in the country.

Turkey’s wholesale broadband access market is well developed, and alternative operators are also benefiting these services. In Turkey, wholesale broadband access regulations are already in place, nurturing a fair competition.
Broadband coverage rates in Turkey stands at even better in some speed levels than the

EU15 averages.
Some 98% of premises has access to entry-level internet while, 66% have access to high-speed internet in Turkey. In the EU15 countries, these speed levels stand at 97% and 55% respectively.

The share of subscribers with 10+ Mbps speed increased from 19% to 72% over the past two years, reaching EU levels much faster than most, if not all, comparable markets. The same evolution took 4.5 years in the EU countries.
High-speed broadband prices in Turkey are lower than other EU nations. Despite lower household incomes compared to EU, 86% of Turkish households can afford high-speed broadband, according to the report.

May we invite you to watch the video interview, we have accomplished after the meeting with Bahjat El-Darwiche Partner of Strategy&.