Digital Divide – Impact on Consumers

Broadband has become the electricity of the 21st century. It is fundamental to the way people work, learn, live and play. More than ever, the pandemic illustrated the critical significance of broadband.

Work from office shifted to work from home. School learning moved towards online learning. More consumers purchased online and even conducted their banking online. To enter a shop to purchase your essential needs, you registered through your online application. Even to receive your Covid vaccination, you had to register then monitor through your online application. Online use and applications have become pervasive in every facet of our daily lives. 

Broadband also plays a crucial role in our economic lives. Microsoft president Brad Smith in his book “Tools and Weapons: The promise and perils of the Digital Age”, indicates that the highest unemployment rates in the country are frequently located in the states with the lowest availability of broadband, highlighting the strong link between broadband availability and economic growth.

In a world reliant on modern high-speed access to data, an area without broadband is a communication desert. And a person not having access to broadband can be severely disadvantaged in the economic and social sphere. 

Brad would add that in a study in the US, 80 new jobs are created for every thousand new broadband subscribers. An increase of four megabytes per second in residential broadband speed translates into an annual increase in household income of US$2,100. Furthermore, people looking to find a job would find a job 25% more quickly through online searches than through more traditional approaches. 

In summary, studies have clearly shown that increases in internet accessibility are positively associated with improvements in socio-economic outcomes such as educational attainment, job opportunities, political engagement and health literacy. Thus, broadband plays a crucial role in the economic life of consumers.

Do Malaysians have an equal access to broadband?

Broadband can be divided into fixed broadband and mobile broadband. Fixed broadband refers to connection tied to a location such as home or office while mobile broadband refers to a connection that is portable usually assessed through a smartphone. For the two essential purposes of working and studying from home, fixed broadband rather that mobile broadband is the key.

While mobile broadband is used extensively in Malaysia, fixed broadband has several advantages over mobile broadband offering higher data transfer speed, better network stability and unlimited data. For households where broadband is used for work such as video conferencing and online learning for schools and universities, fixed broadband offers distinct advantage over mobile broadband. Furthermore, fixed broadband access, whether at home, work or school is associated with devices such as laptop in which users are more likely to be engaging in educational and productive work. 

Malaysia’s fixed broadband penetration is lower than the global penetration average that is Malaysia’s penetration average is 8.6% compared to the global average of 15.5% in across 178 countries. Penetration of other countries in the region are 13.6% in Vietnam, Thailand (13.2%) and South Korea (41%). Based on a study by Khazanah Research Institute, it is estimated that only 35% of the population have access to fixed broadband connection.

Looking further at the low penetration rate, according to a study by Kenaga Research, 35.3% of household in urban areas have access to fixed broadband while only 11.7% of households in rural areas have access to fixed broadband.

Is broadband affordable in Malaysia? According to the United Nations’ Broadband Commission for Sustainable Development 2018, affordable internet is where 1GB of mobile broadband data is priced at 2% or less of average monthly income. Using this benchmark, Malaysia performs well in terms of mobile affordability. 

In relation to fixed broadband, studies indicate that there is a significant positive relationship between fixed broadband subscription rates and median household income. Thus, fixed broadband is only affordable at the 2% threshold in the more well to do states. In the poorer states of Sarawak, Sabah, Kelantan, Terengganu and Kedah, state subscription rates for fixed broadband penetration are below the national subscription states.

In a study by the Education Ministry, it was found that 36.9% of students did not own any device to follow online lessons. Of those who followed online lessons, 46.5% relied on mobile phones. Only 15% of students had personal computers with which to access home learning while 5.8% used a tablet. 

Are we doing enough to bridge the divide between the rural and urban communities? According to the Deputy Communications and Multimedia Minister, the Malaysian Communications and Multimedia Commission (MCMC) is not doing enough to improve connectivity in underserved areas. During a parliament session, the deputy minister urged that connectivity improvement projects for rural areas be expedited. 

Due to the critical importance of the digital economy for workers, students and households, it is crucial that digital inclusion is given the highest priority by the government. Digital inclusion means that all individuals and communities, including the most disadvantaged, have access to and use of information and communication technologies.

According to the National Digital Inclusion Alliance, there are four key components to digital inclusion – access to affordable, robust broadband service and the internet enabled devices, digital literacy training, technical support consumers need to fully benefit from the opportunities the internet promises, and applications and online content designed to enable and encourage self-sufficiency and participation.

The government should give the highest priority to bridge the digital divide and ensure the fullest digital inclusion for all members of society, but especially the disadvantaged and vulnerable groups. – June 23, 2021.

* Paul Selva Raj is the secretary-general for Federation of Malaysian Consumers’ Associations 

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight.

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