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The Relationship Between Local Content, Internet Development, And Access Prices

The Relationship Between Local Content, Internet Development, And Access Prices

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Published by InternetSociety
THE RELATIONSHIP BETWEEN LOCAL CONTENT, INTERNET DEVELOPMENT
AND ACCESS PRICES
This research is the result of collaboration in 2011 between the Internet Society (ISOC), the
Organisation for Economic Co-operation and Development (OECD) and the United Nations Educational,
Scientific and Cultural Organization (UNESCO). The first findings of the research were presented at the
sixth annual meeting of the Internet Governance Forum (IGF) that was held in Nairobi, Kenya on 27-30
September 2011.
The views expressed in this presentation are those of the authors and do not necessarily reflect the
opinions of ISOC, the OECD or UNESCO, or their respective membership
THE RELATIONSHIP BETWEEN LOCAL CONTENT, INTERNET DEVELOPMENT
AND ACCESS PRICES
This research is the result of collaboration in 2011 between the Internet Society (ISOC), the
Organisation for Economic Co-operation and Development (OECD) and the United Nations Educational,
Scientific and Cultural Organization (UNESCO). The first findings of the research were presented at the
sixth annual meeting of the Internet Governance Forum (IGF) that was held in Nairobi, Kenya on 27-30
September 2011.
The views expressed in this presentation are those of the authors and do not necessarily reflect the
opinions of ISOC, the OECD or UNESCO, or their respective membership

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Published by: InternetSociety on Oct 15, 2013
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12/21/2015

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234.

Ten years ago, Japan was one of the leading countries in mobile Internet development. Mobile
operator NTT Docomo introduced its "i-mode" service in 1999 and it was seen as a revolutionary new
model for localised content delivery at the time. The service was somewhat limited as it provided access
only to content which the operator had approved. Creators would submit their content for approval and
then the mobile operator received a percentage of the revenues for its role as an intermediary in the
transaction.

235.

One of the drawbacks of the approach was that the operator NTT Docomo became the entity that
decided which content was available on the network. This is referred to as a “walled garden” business
model since users are limited to the content and services within the walls of the network provider.
Nonetheless, i-mode and other rival services that followed in Japan led to a broad take-up of mobile
services and content. This large user base then attracted more localised content. The walled garden
approach came under pressure around 2007 when full-Internet browsing became common on mobile
phones and operators faced increasing pressure to offer more open access to content. However, i-mode
services have continued to grow over time with both the amount of content available and the number of
pages viewed per user (see Figure 36).

Figure 39. Figure: Number of official content sites (NTT i-mode service) and daily page views per user

Source: NTT docomo

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236.

One of the recent trends with mobile content is that companies offer services where the price of
connectivity is included in the device. This means that customers do not have a direct relationship with a
network provider such as via a monthly subscription or pre-paid card. Examples can be found in services
such as e-book readers (e.g. Amazon Kindle) and GPS devices (e.g. Tomtom Live Services). These
developments are important because it is the content provider itself that subsidises the network access cost
as part of their content services.

237.

In the past several years, data services on mobile networks have become much closer to their
wired counterparts – allowing relatively unfettered access to Internet-based content. There are some
services that are commonly limited on mobile data networks but by and large, the networks can be used in
similar ways. Mobile Internet subscribers often pay a monthly for a certain amount of data that they are
allowed to transfer in a given month. Prepaid data plans are common in some countries.

238.

Handsets themselves have evolved over the previous 10 years and are now much better equipped
to create content – often running sophisticated operating systems that were available only on computers
before – and featuring content tools such as quality cameras. These "smartphones" have become common
in developed countries and are increasingly now used in developing countries. The use of smartphones has
helped promote the use of mobile broadband for content delivery.

239.

Mobile handsets themselves have evolved to become much easier to use to create and distribute
content. Popular mobile operating systems allow users to take content on their mobile phone and share it
easily with others using social media, e-mail or SMS (see Figure 37).

Figure 40. Sharing content over the Internet using a mobile

Screenshot of the Android operating system offering different methods for sharing content

Source: http://freesoftwa.blogspot.com/2010/12/review-google-nexus-s.html

69

240.

One key transformation of the mobile market was the introduction of digital content through
online stores directly to mobile devices. The largest digital media store is Apple's iTunes store which was
developed to support its consumer electronics such as the iPod and iPhone. These online outlets sell digital
content in the form of audio, video, electronic books and mobile applications (often called "apps"). The
growth of these stores has been phenomenal. iTunes opened in July 2008 with just 500 applications
available for purchase but just three years later there were nearly 450 000 applications.22

By January 2011,

Apple's iTunes store had delivered 10 billion application downloads.23

241.

The phenomenal growth of this these content delivery platforms has also helped create a global
market for locally produced content and applications by reducing the barriers to entry for application
development. In July 2011, there were just over 100 000 active application developers on the iOS platform
– working out to an average of roughly 4 applications per developer.24

The high number of developers
shows that small companies or individuals are able to develop and sell their mobile apps to all over the
world. This expands business opportunities to many SMEs and individuals who may never have those
business chances in the mobile application value chain.

242.

In spite of rapid development of online application markets, challenges still remain in many parts
of the world to open these stores to all users. One of the key challenges is that many online application
markets require an account with a verified payment method to download any applications or content. This
can be a significant barrier in some countries where access to credit is difficult. Apple’s iTunes store has
started allowing users to create an account without a credit card so as to get free applications.

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