‘Online ecosystem records over 600,000 first timers daily’

onlineVirtually on a daily basis, over 600, 000 people are said to visit the Internet as first timers. These statistics are contained in a new report titled: ‘The Internet Value Chain’, put together by the Global System for Mobile communications Association (GSMA).

The report quoted the Chief Regulatory Officer, GSMA, John Giusti, saying “each day, more than 600,000 people go online for the first time, supported by a highly interdependent ecosystem of companies including mobile operators.”

Other key findings in the report included that the value created by the Internet ecosystem is increasingly captured by online service providers. It pointed out that in 2015; online services captured nearly half of the revenues of the entire Internet ecosystem (47 per cent, EUR 1.4 trillion).

Amongst these, the report observed that a few powerful players are expanding their influence across the Internet ecosystem by acquiring players in other segments.

Although Internet connectivity revenue is growing, the report noted that the proportion of value captured by connectivity players is declining. According to it, connectivity revenue grew from EUR 199 billion in 2008 to EUR 508 billion in 2015, but this represents a smaller share of the total Internet value chain, declining from 18 per cent to 17 per cent, with a continued slide to 14 per cent expected by 2020.

For mobile network operators, connectivity revenues generated by increased Internet use are not offsetting the decline in revenues from traditional communication services, and mobile data revenues are also forecast to grow at a lower rate than the growth of other segments. It stressed that these trends pose challenges for investment in mobile networks that support the growth of the Internet ecosystem.

The Internet Value Chain report noted that the ecosystem is maturing, adding that innovation and technical development still proceed at pace, but the largest players in any given segment deliver higher returns and profit margins. “They have secured their leadership position and fewer new players are achieving scale. 11 of the top 15 US websites visited by users in 2009, for example, were still among the top 15 in 2015.”

Giusti observed that connectivity is at the heart of the digital ecosystem, but policy and regulatory frameworks have not been modernised to reflect these new market dynamics brought about by the Internet.

“We hope this study will be a useful input at a time when policymakers are thinking about the policy implications of the digital ecosystem, and we encourage them to remove unnecessary regulation to foster innovation and drive consumer benefits”, he added.

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