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Last Updated: Thursday, 10 November 2005, 17:05 GMT
UN slates online costs for poor
Image of boys using a laptop
Most countries realise the net has enormous benefits
The cost of fast net access and linking up to the net's global infrastructure hits poorer nations much harder than developed countries, says a UN body.

The UN Conference on Trade and Development (Unctad) said this meant that nations lacked in e-commerce.

It also pointed to cybercrime threats which could dent potential advantages the web could offer developing nations.

The report was released ahead of next week's Tunis summit of world leaders and experts to discuss key net issues.

The World Summit on the Information Society is taking place between 16-18 November.

The Unctad report found that there are big differences between businesses in developing and developed nations when it came to how much it costs to link up to international networks.

This means they may not be able to take full advantage of the economic benefits the net has.

In the European Union, 89% of businesses were online, but the figure was far lower for less developed countries.

There are fairly extensive differences between developing nations too.

Only 9% of firms in Thailand are online, while Trinidad and Tobago has 77% of firms online, said the report.

Hopping online

Despite these findings, the net take-up was continuing to grow slowly in developing nations, with Africa seeing the highest growth rates.

Opening markets to competition would be a good first step in bringing down prices for domestic and international infrastructure and encouraging ISPs to exchange traffic locally
Sam Paltridge, OECD
Cheaper access to leased lines, more efficient and secure businesses systems, as well as more competition in local markets would help developing nations have a more equal footing with developed countries, said the report.

Mobile phone services, however, were increasingly providing businesses and communities with a crucial lifeline.

Although in many cases a single mobile was used by several people in remote locations, it still extended a small business's reach and access to information.

In Africa, mobile subscriptions rose from 15 million in 2000 to more than 80 million in 2004, an increase of 433%. In Romania, the majority of broadband connections were through 3G mobile networks.

Fast lane access

The report highlighted that the big issue around "digital divides" was how much it costs developing nations compared to developed nations to get online and, crucially, to get faster access.

Broadband is crucial for businesses as it can help them be more efficient, and "plugged in" to online content, services and applications.


But the report found developing economies lagged behind significantly in broadband.

Even countries which were not at the bottom end of the digital divide, such as South Africa, Egypt and Tunisia, had fewer than 1% broadband connections.

Smaller businesses, which could benefit the most, were unlikely to be online at all, let alone be on broadband, said the report.

The Unctad report recommended that net service providers in developing nations be supported internationally and collaborate locally to increase their bargaining clout, as well as market knowledge.

This would ensure they had a more equal economic footing when it came to negotiating connection costs with the firms that control access to the global net infrastructure.

In many cases, the terms for routing e-mails and other net traffic were less favourable than in developed nations, with costs and earnings of net traffic in and out of countries shared unequally.

In some instances 70% of local net service provider costs were in leasing net lines from the incumbent country operators.

"If we take Africa by way of example there is a state of the art international undersea cable running along the west coast and another connecting that cable to India and on to Malaysia," explained Sam Paltridge, analyst at the OECD (Organisation for Economic Co-operation and Development).

"By most accounts the cable connections to Africa are vastly under-utilised and over-priced. Opening markets to competition would be a good first step in bringing down prices for domestic and international infrastructure and encouraging ISPs to exchange traffic locally.

Image of a woman using computers
The net for developing countries needs to be cheaper
"At the same time developing greater inter-networking skills would enable ISPs in African countries to exchange more traffic locally and host a greater amount of relevant content and services locally."

One recommendation was that countries set up net exchange points (IXPs) so that net traffic could be collected regionally.

This would mean an e-mail sent from one country to a neighbouring nation did not have to be routed through the US, as it is now.

But many developing nations have restrictions on the creation of such exchanges, said the report.

"IXPs are a 'win-win' situation for everyone concerned," said Mr Paltridge.

"They enable traffic to be exchanged locally and therefore bypass high international prices as well as offering better performance, and encouraging content providers to host locally.

"Greater awareness of these advantages is breaking down opposition."

Crime and behaviour

Cybercrime threats remain a big problem for all on the net.

But the report warned that developing nations should do more to upgrade its technology to guard against such threats, formulate cybercrime laws and policies in line with international standards, as well as equip police authorities to deal with net crime.

It also suggested businesses in developing nations upgrade systems for keeping and transferring records, banking, and other data processes.

This would make them more suited and make it easier to efficiently compete in the global online economy.

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