The 2 Big Points

So I have submitted a draft of my paper to my faculty adviser. I'm not going to post it just now, but I'll lay out gist of it.

Situation:

People are concerned about the "digital divide" - that is they worry that the poor who can't afford internet access will be excluded from the new information economy.

Wireless broadband (WiMAX) can help provide access for the poor in the developing world because it solves the last mile problem (the expensive last mile of wire infrastructure that must be built to connect users the communication infrastructure backbone.) This is exactly what happened a few years ago when cell phones leapfrogged wireline phone infrastructure in the developing world.

Telecoms don't seem to be interested in doing this because they claim you can't make money selling data service to poor people.

The U.N. and governments are doing studies and making recommendations on how to increase demand to sweeten the business proposition for telecos.

My analysis:

WiMAX is a lot different business proposition than cell phones were for a couple reasons. Cell phone service providers were able to do some creative pricing things they won't be able to recreate as easily (calling party pays, no-contract pre-paid minutes) with WiMAX. Without those tools at their disposal, providers will have less incentive to provide broadband access in the developing world.

Also, even with access, the poor in the developing nations don't have much reason to use the technology in its current state (they don't have computers, they have less general education, they speak less English etc.) This means low demand for service and hence low revenues.

So governments can engage in programs to encourage computer ownership, improve education etc. That's great, but there are other ways to spur demand. What WiMAX and the Internet in the developing world really need is a killer app. Something that makes using the Internet (especially the mobile Internet) and easier and more valuable experience for people in the developing world.