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Home Broadband Speed Impacts Household Income

Stocks in this article: ERIC

STOCKHOLM, Sweden, Sept. 17, 2013 (GLOBE NEWSWIRE) --

  * First study to quantify impact of broadband speed on household income
  * Upgrade from 4 to 8 Mbps increases income by USD 120 per month in OECD
  * Increase from 0.5-4 Mbps gives a USD 46 per month increase in income in
    Brazil, India and China (BIC)
  * Principle holds for both OECD and BIC countries, however returns are
    correlated to country GDP

Ericsson (NASDAQ:ERIC), in conjunction with Arthur D. Little and Chalmers
University of Technology, today releases results of a joint study on the
economic effects of broadband access speed on households.

This household-level (microeconomic) study reveals thresholds for the minimum
speed upgrade needed to provide a statistically significant impact on household
income. These thresholds are different for OECD  (Organization for Economic
Cooperation and Development)and BIC (Brazil, India and China) countries.

Absolute levels of return*, were found to be higher for OECD economies, which
supports the idea that gains from broadband increase if more advanced services
are available via the broadband access.

Key findings, after controlling for factors known to influence income (i.e. age,
sex/gender, education, household size, skills and type of occupation):

  * The average increase in household income for a broadband speed upgrade from
    4 to 8 Mbps is USD 120 per month in OECD countries
  * BIC households benefit most by upgrading from 0.5 to 4 Mbps, at USD 46 per

Sebastian Tolstoy, VP Radio Business development and Strategy, Ericsson, says:
"Results are in line with our previous study that quantified the impact of
broadband speed increases on the gross domestic product of 33 countries, as well
as a slew of other studies we reviewed. All indicate that broadband access has a
positive effect on the economy. We know that speed matters and that upgrading
broadband speed has a positive impact. Now we have shown this quantitatively
using large data samples in both OECD and BIC economies, even at the household

Martin Glaumann, Partner at Arthur D. Little, says: "The evidence is building
for broadband speed as a driver of economic growth. Yet in many countries, not
least in the EU, regulatory developments are holding back the full growth
potential. Regulators need to rethink and recognize high-speed broadband as a
national imperative for BIC countries. Broadband gives households the means to
improve skills and productivity through e-learning and business services, but
also to gain access to new venues for consumption."

Erik Bohlin, professor at Chalmers University of Technology, says: "This is one
of the first studies to address impacts from broadband speed on household
income. Based on rigorous scientific methods and comprehensive data, the study
can show that increased broadband speed increases income, which has a number of
important policy and strategy implications."

There are several key sources to this study, including Ericsson ConsumerLab
survey data from 2010, covering more than 19,000 households from 8 OECD
countries (UK, France, Germany, Italy, Spain, Sweden, Japan and the US), as well
as Brazil, India and China.

*All results have been adjusted for Purchasing Power Parity (PPP), to reflect
absolute level of returns.

Press release from September 2011: New study quantifies the impact of broadband
speed on GDP

This research will also be included in the Broadband Commission State of
Broadband Report, published on Sept 21

Upcoming events: Social Good Summit in New York Sept 22-24.

Download high-resolution photos and broadcast-quality video at

Ericsson is a world-leading provider of communications technology and services.
We are enabling the Networked Society with efficient real-time solutions that
allow us all to study, work and live our lives more freely, in sustainable
societies around the world.

Our offering comprises services, software and infrastructure within Information
and Communications Technology for telecom operators and other industries.Today
40 percent of the world's mobile traffic goes through Ericsson networks and we
support customers' networks servicing more than 2.5 billion subscriptions.

We are more than 110,000 people working with customers in more than 180
countries. Founded in 1876, Ericsson is headquartered in Stockholm, Sweden. In
2012 the company's net sales were SEK 227.8 billion (USD 33.8 billion). Ericsson
is listed on NASDAQ OMX, Stockholm and NASDAQ, New York stock exchanges.


Ericsson Corporate Communications
Phone: +46 10 719 69 92

Ericsson Investor Relations
Phone: +46 10 719 00 00


Household income press release PDF:
Photo Sebastian Tolstoy:


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