Doubling UAE broadband speed can raise GDP by $690m

DUBAI - New research, released by Swedish telecommunications major Ericsson,

Claims that doubling the speed of broadband in the UAE can add as much as $690 million to the country’s GDP.

The study, jointly conducted with Arthur D. Little and Chalmers University of Technology quantifies the isolated impact of broadband speed, showing that doubling the broadband speed for an economy increases Gross Domestic Product (GDP) by 0.3 per cent. The study also shows that additional quadrupling the speed could yield a 0.6 percent GDP growth stimulus.

“This study reflects the tremendous amount of influence that connectivity has on the socio-economic aspects of society not just here in the UAE, but around the world,” said Anders Lindblad, president, Ericsson Region Middle East and North Africa. “The numbers are clear evidence that we are evolving from an information society to, what we at Ericsson call, a Networked Society. We have reached a stage where broadband has developed and is no longer simply a tool for communication but an enabler for new possibilities for people, business and society,” he added.

Ericsson claims that both broadband availability and speed are strong drivers in an economy.

Last year a similar report from Ericsson and Arthur D. Little concluded that for every 10 percentage point increase in broadband penetration GDP increases by 1 percent.

Erik Almqvist, Director at Arthur D. Little, said, “Until now there has been an absence of hard facts investigating the effects of broadband speed on the economy. This unique empirical study may help governments and other decisions makers in society make more correct tradeoffs and policy choices.” This study is claimed to be the first of its kind to quantify the economic impact of increases in broadband speed in a comprehensive scientific method using publicly available data.

“These results have been derived using rigorous scientific methods where the direction of causality, data quality and significance levels have been appropriately tested,” says Erik Bohlin, Professor at Chalmers University of Technology. “The results of this study support governmental policies that recognise and promote the importance of broadband.”