OECD: Infrastructure to 2030

Organisation for Economic Co-operation and Development. 2006. Infrastructure to 2030. Paris: OECD.

”Tomorrow’s infrastructure will demand a much lower spend than today’s fixed line and cellular mobile and will be much quicker to roll out” (53).

“Often overestimated in the past, telecommunications will nevertheless increasingly be viewed as a potential substitute for travel. This could reduce dependencies on vehicles and their fuels and ameliorate the effects of pollution” (54).

“This section briefly reviews the telecommunication infrastructure developments of the past 25 years by examining gfour areas of trends in infrastructure investment:
-past demand and the main drivers
-current state of the infrastructure
-whether past developments in demand will continue
-which trends seem clearly unsustainable” (61).

The publication presents a table over viewing the main drivers of telecommunication demand. Under the “main drivers” of broadband (long-distance, not local loop) demand are “cost and technical (ease of upgrading capacity) for growing international data traffic, especially Internet users after 1996/7 as World Wide Web interface made the Internet popular” (62). It is clear that the roll-out of broadband is very heavily driven by consumer demand.

“The major point here is that there is an underlying force behind the successful developments of recent times. Liberalization has been a significant driver of infrastructure development over the past 25 years since it has allowed the door to open to a new era of multiple infrastructures. Demand-side forces, especially the power of consumers acting on the political balance in government, have produced a revolution in the three key infrastructure drivers of telecommunications:
-…deregulation…
-competition of all kinds…
-new technology…” (64).

What about the future of telecom demand? “With the growing importance of the knowledge-based economy, the demand for telecommunications and its infrastructure will continue to expand well beyond 2030” (68).

“Key factors driving future demand and infrastructure investment” (70).
“-geopolitics;
-security;
-macroeconomy;
-finance;
-demography;
-environment;
-technology;
-governance;
-telecommunications pricing;
-microeconomics—primary consumer basics inflation” (70).

“Projected trends in demand for telecoms and investment to 2030” (78).

“Accessibility = control of access + cost of access + ease of access + ubiquity + speed of rollout” (79).

“In general we can say that the main trend in demand for telecommunications that will drive infrastructure is a massive expansion of demand globally from developin countries, firstly as incomes increase to around the USD 3 000 level. Secondly we can expect take-up for those below this income level, as prices fall” (82).

“In later years, beyond 2015, an increasing component of traffic is expected to be machine-to-machine communications and transactions over the Internet, especially in industrial applications such as supply chain, process control and also in financial transactions for person to machine. An ‘Internet of things’ will grow up. Machine-to-machine communications for industrial and consumer functions and person-to-machine, for instance to make purchases, will be increasingly an everyday event. The impact on infrastructure will be to increase not only the traffic, but the address space required for all the new respondents” (84).

“The telecommunications industry has been notoriously poor at forecasting the take-up of new technologies and services, largely because market forecasts have often been supply driven and technocentric and do not focus on understanding consumers; behavior and their needs—and what they will pay for…A better approach to forecasting is to identify and understand the underlying trends and their drivers, and to take a demand-driven approach. Firstly a more global view of the market is not essential. This perspective provides an understanding that the overall telecommunications market has the potential to grow to three or four times its current size in terms of the number of consumers, by expansion outside the OECD group. This pricing is important and this will be the key stimulant for consumer take-up. A second key finding is that ‘content is not king’; instead it is connectivity that consumers will pay for as their primary m0otivation as this new market opens…Third, wireless technologies are developing rapidly and allowing infrastructure to be rolled out more cost effectively than ever before, offering the promise of connectivity anytime, anywhere, and at even lower prices…” (85).


The issue of infrastructure investment is then explored. It is highlighted that telecom investment, as a percentage of total infrastructure investment, has found its share steadily growing (86).

Private v public investment: “Private sector-led growth in infrastructure investment has revolutionzed access to telecommunications services around the world over the past ten years. For the OECD community we see that deregulation has allowed new pricing regimes, not controlled by the incumbents, and specifically the VoIP market to take off, despite attempts to ban or restrict it in some countries” (88).

“The key growth regions for telecommunications infrastructure, as outlined above, are in developing countries” (88).

There is a discussion of the future mix of technology, and how this relates to current infrastructure constraints (the local loop, for example).

“In consequence it is possible to see the progressive arrival of a new model of infrastructure, heavily influenced by the requirements of the low-cost demands, from developing countries seeking more ‘bits per buck’ for their billions of people in the under USD 3 000 per year income bracket” (101).

“The result may be parallel operation of two infrastructure models globally for at least a decade: a previous OECD model of mixed long distance carrier standards for trunk networking with a legacy of wireline in broadband DSL and CATV cable in the local loop, and at the same time, the simpler two level radio access/fibre long distance model slowly spreading across the world” (103). The mix of this parallel development is explored for different key regions on 110-1.

Cross-infrastructure impacts on transport are explored on 122-5. On health and medicine on 128-9. On the elderly on 130-1. On education on 131-3. On crime on 133-4.

The chapter ends with policy recommendations.