Th.A2.3 190 ICTON 2008 978-1-4244-2626-3/08/$25.00 ©2008 IEEE Broadband Access and its Impact on the Economy, a Swedish Perspective Marco Forzati, Claus Popp Larsen Department for Networking and Transmission, Acreo AB, 164 40 Kista, Sweden Tel: +46 8 632 7753, Fax: +46 8 750 5430, e-mail: marco.forzati@acreo.se ABSTRACT In this paper we present an evaluation of the impact of broadband penetration on the economy using regression analysis of international data, and we give an overview of the market in Sweden and Sweden's government policy. Keywords: broadband access, techno-economic studies. 1. INTRODUCTION The Internet is perhaps the most revolutionary technological developments that have taken place during this generation. More recently, the advent and quick growth of broadband access has taken Internet connectivity to a new level, and made a large portion of the world population aware of the potential of this technology and its impact on daily life. In some countries this awareness has matured into a political persuasion (see the broadband-for-all slogan) that is directly or indirectly driving the development of broadband access. Sweden is probably one the best such examples. There are various more or less pronounced political ambitions behind increased broadband penetration. An important one is e-government, i.e. the ability to offer online interaction with the citizens, which is believed to simultaneously benefit democracy and significantly reduce the spending within the public administration through higher efficiency. Secondly, broadband penetration leads to ICT maturity, which is believed to benefit industry and trade, through the stimulation of front-edge service and product development, as well as more efficient production, logistics, resource management, etc. Finally, high broadband penetration is argued to lead to a more environmentally sustainable development (e.g. video conferences instead of travelling) and to a lessening of migration from rural areas to large cities. In this paper we give an overview of the broadband access situation in Sweden, discuss current trends and ambitions and review the technologies deployed. We then turn to the question of whether broadband access actually does deliver the benefits claimed and hoped for (democratic-administrative, economical, and social- environmental). This is a broad and complex task, therefore the paper is limited in scope to the economic effects, and specifically to the impact of broadband access on trade. 2. BROADBAND AND INTERNET PENETRATION IN SWEDEN Sweden has a strong tradition within ICT and broadband. Sweden is no. 8 in broadband penetration per 100 citizens worldwide [1]. Broadband is here defined as “always connected” with no bandwidth requirements. Sweden’s Internet penetration per household (broadband and not) since the year 2000 is shown in Fig. 1 [2]. Observe that Internet penetration is getting saturated: by Q2 2007 it was 73% and slowly growing. Total broadband penetration however was 54% and still growing fast (this should be compared to Korea’s 94% in 2006 which by far is the highest worldwide [1]). In the same period, the portion of Swedish households with a downstream connection of at least a 2 Mbit/ was 41%, while the figure for 10 Mbit/s or more was 16%. In the World Economic Forums report “The Global Information Technology Report 2007- 2008” [3] different indicators have been measured and compared for 127 economies worldwide. The indicators are the environment for ICT offered by a country or community; readiness of the community's key stakeholders (individuals, business and governments); and usage of ICT among these stakeholders. The report shows that Sweden is in the absolute top, only exceeded by Denmark. 0% 10% 20% 30% 40% 50% 60% 70% 80% Q4 2000 Q2 2001 Q4 2001 Q2 2002 Q4 2002 Q2 2003 Q4 2003 Q2 2004 Q4 2004 Q2 2005 Q4 2005 Q2 2006 Q4 2006 Q2 2007 Internet access Fixed connection = broadband ≥ 10 Mbit/s ≥ 2 Mbit/s Figure 1. Internet and broadband penetration in Sweden, per household [2]