//Why the bad internet harms innovation in the United States – the point of view of Kazakhstan

Why the bad internet harms innovation in the United States – the point of view of Kazakhstan

Presented by Kazakhtelecom

I recently returned from a business trip to the United States, where I had to travel about 3,000 miles across the country. I was shocked by the poor functioning of the mobile and wired internet in one of the most developed countries in the world.

As soon as I left New York for a few hours, the AT & T signal level was down one line, then two lines, and into small towns in the area from Tyoga Forest, there was no connection. I could barely start following my route without the Google browser being connected to the Internet, and it took me about an hour to go around the network looking for a network.

During this two-week trip, LTE's speed barely exceeded the 10 Mb / s and the high-quality connection ended immediately off main roads or major cities. In addition, AT & T and Verizon claim to offer the best Internet coverage in the United States! My colleagues who used the T-Mobile and Sprint services were even less fortunate – for most of our trip they were unrelated.

Wired Internet also leaves a lot to be desired. Only 25% of US households have fiber-optic connectivity and the above 10 Mb / s are the limit of US Internet capacity.

The reasons are very clear: the vast expanse of the country, many areas with extremely low population density (where cell towers are economically irrational) and some with extremely high population density ( where the network is overloaded) time), the complicated procedure of installing new base stations, the protests of radiophobes, etc.

How to solve these problems in Kazakhstan?

In Kazakhstan, where I come from, these problems are very familiar. The country is of comparable size to Argentina and is five times the size of France. But only 18 million people live here, and most of them live in villages thousands of miles apart.

In fact, we are now solving the problems that North America is facing. A few years ago, when the country's digitization began in Kazakhstan, it became apparent that the 10% increase in mobile broadband penetration could result in GDP growth of 0, 6 to 2.8%.

In monetary terms, this equates to 500-2000 billion dollars

Mobile Internet penetration growth of only 1% represents about 0.2% of GDP growth. What is the utility of having Uber available in the country if a person does not have an internet connection to download mobile apps? What is the purpose of Airbnb if the owner of the room / property can not reply to messages from potential customers and has to go to the neighboring city to find a connection to the network?

That is why digitization in Kazakhstan began with the construction of fiber optic lines and the launch of 3G and 4G.

From 4% internet penetration to 73% in just over a decade

In 2004, the penetration of the Internet in Kazakhstan was only 4%; now, 73% of the population has access to the network. Meanwhile, the country's GDP (due to its purchasing power parity) has more than doubled from 190 billion to 410 billion. Of course, it's not just because of the network, but it's certainly a contributing factor.

Over the next two years, we will increase FTTH coverage to 78% and launch the first 5G network in the hope that digitization will increase the country's GDP by 5% by 2025.

Why are some regions rich and some poor?

There is a similarity between Kazakhstan and the United States – the more difficult the access to the Internet in a given region, the less economically stable the region is. In the United States, I have often been in remote areas, where people live in fields in their trailers.

This image reminded me of the situation in Kazakhstan in the 1990s, when GDP was the lowest in the region and the country was rapidly failing. Some remote areas of the country resembled those of Western films, and people's wages were only a few tens of dollars a month.

The launch of 3G, 4G and optics has revived neglected regions. Villages without qualified teachers had access to Coursera and EDX, and people were able to consult physicians remotely and check the results of their tests.

In addition, talented teachers and entrepreneurs had the opportunity to make money online. The best government in the region better than that of many European countries, also appeared.

Another important step in overcoming digital inequalities is optimizing content delivery in remote areas. Programs such as Google's Global Cache, Facebook Network Appliance, and Akamai AANP can host cache servers in the regions, so residents can receive content much faster than if they try to download a Facebook video from a Californian server. This reduces the final cost of the Internet per individual user and improves the quality of access.

In my opinion, it is strange that the major countries of the world are spending billions of dollars for military programs, but at the same time forget the basic infrastructure, such as a good Internet connection.

In the 21st century, having a high quality internet connection is almost as important as access to roads, medicine or education.

Nurlan Meirmanov is executive director of Kazakhtelecom, Kazakhstan's largest telecommunications company. "Kazakhtelecom" is a Crown corporation with net assets of $ 1.2 billion, revenue of $ 640 million in 2017 and sustainable growth of + 64% in asset value in 2014-2018 . Its market share in the country's telecommunications is 40%, mobile telephony – 25%, television – 45%. It has 9.5 million subscribers.

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