Broadband access can boost a household’s income by US$120 a month

17 Sep 2013

Access to broadband can have the impact of increasing household income, a new study from Ericsson reveals, pointing out that in OECD countries monthly income can rise by US$120 per month while in Brazil, India and China, incomes can rise by US$46 per month.

In what Ericsson claims is the first study to quantify the impact of broadband speeds on household incomes, the study found that if households in OECD countries saw speeds increase from 4Mbps to 8Mbps, the corresponding effect on household incomes would be an additional US$120 per month.

In Brazil, India and China, an increase from 500Kbps to 4Mbps would have the effect of increasing household incomes by US$46 per month.

Ericsson conducted the study in conjunction with Arthur D. Little and Chalmers University of Technology.

“Results are in line with our previous study that quantified the impact of broadband speed increases on the gross domestic product of 33 countries, as well as a slew of other studies we reviewed,” said Sebastian Tolstoy, VP of Ericsson’s Radio Business development and strategy.

“All indicate that broadband access has a positive effect on the economy. We know that speed matters and that upgrading broadband speed has a positive impact. Now we have shown this quantitatively using large data samples in both OECD and BIC economies, even at the household level,” Tolstoy said.

Broadband is an economic driver

broadband income

Martin Glaumann, partner at Arthur D. Little, said the evidence is building for broadband speed as a driver for economic growth.

“Yet in many countries, not least in the EU, regulatory developments are holding back the full growth potential. Regulators need to rethink and recognise high-speed broadband as a national imperative for BIC countries.

“Broadband gives households the means to improve skills and productivity through e-learning and business services, but also to gain access to new venues for consumption,” Glaumann said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years