Recently (during one of many job interviews), I met someone who had worked on a project with many parallels to my research. This past summer, Diamond Technology Management Consultants conducted a study for the City of New York on the most effective way to increase broadband adoption by low-income residents (http://www.nysun.com/new-york/broadband-report-digital-divide-exists-in-city/82951/) The city asked Diamond to investigate ways to increase residential use of broadband internet service, including the potential for a municipal WiFi network. What the firm found, was that the problem was not lack of access to broadband (98% of the residents had access) but that 1) residents didn't have computers to take advantage of the internet, 2) residents didn't understand the benefits of using broadband, and 3) providers were not interested in marketing to low-income users, because the average life-time value of a customer would not justify the high customer acquisition costs.


This is bad news for WiMAX in LATM. This study says that even with access, and even in New York City (with presumably higher literacy rates and levels of technical expertise) low-income consumers were unlikely to take advantage of broadband service. In order to drive usage, governments (and possibly providers) will need to heavily subsidize consumer equipment and education. In addition governments may need to provide some level of guarantee so that telecos could recoup their customer acquisition costs.

I've reached out to one of the consultants who worked on this study. Hopefully he can provide some more insights into the findings and possible solutions.