Worldwide Internet Penetration Rate Part 3

2011 is officially started and I am back from my Holidays vacations as fresh as the Social Network movie on Rotten Tomatoes (97% of freshness while this post was published). Similarly to last year, I have decided to start the year with an update on the world Top 30 countries with the highest Internet penetration rate for nations with more than a million individuals. Since I like numbers and political geography, here is the new Top 30 using data from The Internet World Stats database compared to the two previous ones of respectively April 2009 (see Canada in the Worldwide Top 3 for Internet Penetration Rate) and January 2010 (see Worlwide Top 30 for Internet Penetration Rate in 2010).

Jan. 2011 Jan. 2010 April 2009 Jan. 2011 Jan. 2010 April 2009
Countries Position Position Position Rate Rate Rate
Norway 1 1 2 94.8% 90.9% 87.7%
Sweden 2 2 6 92.5% 89.2% 77.4%
Netherlands 3 3 1 88.6% 85.6% 90.1%
Denmark 4 4 14 86.1% 84.2% 68.6%
New Zealand 5 7 4 85.4% 79.7% 80.5%
Finland 6 5 15 85.3% 83.5% 68.6%
United Kingdom 7 9 16 82.5% 76.4% 68.6%
South Korea 8 8 11 81.1% 77.3% 70.7%
Australia 9 6 5 80.1% 80.1% 79.4%
Germany 10 23 19 79.1% 65.9% 63.8%
Japan 11 10 7 78.2% 75.5% 73.8%
Belgium 12 18 77.8% 70.0%
Singapore 13 15 25 77.8% 72.4% 58.6%
Canada 14 12 3 77.7% 74.9% 84.3%
United States 15 13 10 77.3% 74.1% 72.3%
United Arab Emirates 16 29 75.9% 60.9%
Switzerland 17 11 13 75.3% 75.5% 69.0%
Estonia 18 21 23 75.1% 68.3% 58.7%
Austria 19 16 27 74.8% 72.3% 56.7%
Slovakia 20 26 74.3% 65.3%
Israel 21 14 9 71.6% 72.8% 72.8%
Taiwan 22 24 17 70.1% 65.9% 67.2%
France 23 19 26 68.9% 69.3% 58.1%
Hong Kong 24 20 12 68.8% 69.2% 69.5%
Latvia 25 28 67.8% 61.4%
Ireland 26 22 65.8% 67.3%
Czech Republic 27 65.5%
Malaysia 29 25 24 64.6% 65.7% 59.0%
Slovenia 29 27 18 64.8% 64.8% 64.8%
Spain 30 17 20 62.6% 71.8% 63.3%
Hungary 30 61.8% 59.3%

What has changed?

As stated in my previous post last year, changes in the ranking are mainly due to two factors: (1) changes in the sources used by The Internet Worlwide Stats Database, and (2) natural growth. Since last year, not that much has changed, 9 of the countries in the Top 10 are still present and 29 of the Top 30 are still dominating this ranking. The only newcomer is Czech Republic in position 27. Scandinavia and Oceania are still leaders in terms of Internet Penetration rate while Germany and United Arab Emirates are the winners of this ranking, each gaining a whopping 13 positions. This change for Germany should be related to a change in the source which was underestimating the penetration rate. Furthermore, despite all the financial concerns raised during last recession related to the viability of all luxury hotels, villas and islands in Abu Dhabi, I would tend to think that most of the increase for the United Arab Emirates is linked to technological growth rather than a change in sources.

Furthermore, I would also add some doubts about the strange downward variation for Spain that should certainly be related to a change in source too.

Logic and statistical interpretation 101

When looking at this ranking, it is important to understand that all countries have different ways of measuring the Internet Penetration Rate, but globally unless there are bombing destroying a country similarly to Japan in World War II, there should not be more than a 2% downward variation, a variation that could be related to statistical noise. Even for growth, more than 10% for a year is generally associated to a change in the source used, especially for European countries, since absolute and relative growth is mainly seen for BRIC (Brazil, Russia, India, China) countries. Thus, even though these countries have low Internet Penetration Rates, they account for nearly one-third (32.36%) of the world Internet users population, China alone accounting for more than one-fifth (21.35%). Here is below a table representing the Internet Penetration Rate of these four countries but also the percentage of users in comparison to the world total.

Jan. 2011 Jan. 2011
Countries Rate % World
Brazil 37.8% 3.86%
Russia 42.8% 3.03%
India 6.9% 4.12%
China 31.6% 21.35%

BRIC countries: Brazil, Russia, India and China
BRIC countries: Brazil, Russia, India and China

Conclusion

In conclusion, there is not that much new concerning the Worldwide Top 30 countries for Internet Penetration Rate. However, what will be more and more interesting to look at in the future is the growth of the BRIC countries. Furthermore, I know it’s only the beginning of the year, but if you’re looking for a techno-trendy country or city to visit, this ranking is a good complement to my post entitled The 10 Most Hi-Tech Cities in the World, but also to the lucky 13 cities in the world described in my post entitled The art of Being Perceived as an Innovative Mind in Marketing.

Happy new year to everyone!

Jean-Francois

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Pointing Towards a Competitive Future for Mobile Markets in Canada?

Canada is one of the countries where consumers pay the highest mobile contract fees in the world. In short, this situation is mainly due to an oligopolistic/cartelistic structure that favors providers/retailers over consumers, which lowers competition and encourages scarcity on the supply side. The customer empowerment concept can essentially be thrown away for that particular market. To better understand how this market is evolving in Canada, and especially in Quebec, one interesting approach, that some may argue simplistic, is to use the 5 components of the Porter model: (1) manufacturers, (2) retailers/providers, (3) new entries, (4) substitute products, and (5) consumers.

The Porter Model on Competition (1980)
The Porter Model on Competition (1980)

1. Manufacturers

Let’s start with manufacturers. This is where the competition is most aggressive, since it is an international competition. Companies continue to evolve and many new products are launched. The following companies are actually selling/competing in Canada.

1. Apple (iPhone)
2. HP
3. HTC
4. LG
5. Motorola
6. Nokia
7. Palm
8. Research in Motion (BlackBerrY)
9. Samsung
10. Sanyo

2. Retailers/providers

Providers have to be considered as the starting point of our anti-competition story. First, there are not many providers/retailers, and secondly, all of these providers control other sub-brands.

1. Rogers controls Fido
2. Telus controls Koodo
3. Bell controls Solo & rent its network to Virgin Mobile

Thirdly, as in most countries, the low number of providers encourages exclusivity for a specific phone. For instance, Telus has, at the time being, exclusivity on the HTC Pro 2 which reinforces the power of the provider over consumers.

3. New entries

The end of this oligopolistic structure is still under legal fights, notably for access to networks. Up to 6 providers (for more on the topic, I would suggest to read the following post by Ian Hardy) are supposed to join the market in the next few years. Here is the list:

1. DAVE Wireless
2. EastLink
3. Globalive
4. Public Mobile
5. Shaw
6. Videotron (already slowly entered)

Like in most oligopolistic markets, the entry of these new competitors would favor lower prices and give more power to consumers.

4. Substitute products

In comparison to other products, with the emergence of powerful smartphones that are integrating features (see my post entitled Three types of convergence – Is the future friendly? for a discussion about convergence), the mobile market in Canada is taking market shares away from other products such as cameras, MP3 players, electronic agendas,etc…

5. Consumers

Many customers are still locked-in with awful 3-years contracts. Furthermore, the structure of monthly contract fees encourages these 3-year contracts. Some providers have even started to pay the end of some consumers contracts’ with another provider in order to gain new clients they would thereafter locked-in with 3-year contracts.

Conclusion

To conclude, the mobile market in Canada doesn’t favor competition at all which puts the consumers handicapped with expensive contracts. However, the possible entry of new providers should favor more competition and lower the prices in the next few years. Let’s wait and see what the future will be, and like the Telus catchy sentence say, we only hope that the “future is friendly” for the consumers that we are? Any comments?

Jean-Francois Belisle

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Worldwide Top 30 for Internet Penetration Rate in 2010

My second post on this blog entitled Canada in the Worldwide Top 3 for Internet Penetration Rate, which is one of the most viewed, was about a worldwide ranking based on one of the most important macroeconomic indicators of innovation: “the Internet penetration rate”. This post did not generated lots of comments at the time, but many people find it useful to cite for the first steps of a presentation. However, with time, new data have become available and the shape of the ranking has changed. Using data from The Internet World Stats database, this post is an update of the Top 30 countries with the highest Internet penetration rate for nations with more than a million individuals, so here is the new Top 30 compared to the previous one of April 2009:

Jan. 2010 Jan. 2010 April 2009 April 2009
Countries Position Rate Position Rate
Norway 1 90.9% 2 87.7%
Sweden 2 89.2% 6 77.4%
Netherlands 3 85.6% 1 90.1%
Denmark 4 84.2% 14 68.6%
Finland 5 83.5% 15 68.6%
Australia 6 80.1% 5 79.4%
New Zealand 7 79.7% 4 80.5%
South Korea 8 77.3% 11 70.7%
United Kingdom 9 76.4% 16 68.6%
Japan 10 75.5% 7 73.8%
Switzerland 11 75.5% 13 69.0%
Canada 12 74.9% 3 84.3%
United States 13 74.1% 10 72.3%
Israel 14 72.8% 9 72.8%
Singapore 15 72.4% 25 58.6%
Austria 16 72.3% 27 56.7%
Spain 17 71.8% 20 63.3%
Belgium 18 70.0%
France 19 69.3% 26 58.1%
Hong Kong 20 69.2% 12 69.5%
Estonia 21 68.3% 23 58.7%
Ireland 22 67.3%
Germany 23 65.9% 19 63.8%
Taiwan 24 65.9% 17 67.2%
Malaysia 25 65.7% 24 59.0%
Slovakia 26 65.3%
Slovenia 27 64.8% 18 64.8%
Latvia 28 61.4%
United Arab Emirates 29 60.9%
Hungary 30 59.3%
Italy 51.7% 22 59.7%
Portugal 41.8% 8 72.9%
Bulgaria 36.7% 28 55.1%
Romania 33.4% 29 53.9%
Belarus 32.2% 21 61.9%
Jamaica ND 30 53.5%


The changes in the ranking are mainly due to two factors: (1) changes in the sources used by The Internet Worlwide Stats Database, and (2) natural growth. The new ranking includes all members of Scandinavia in the new top 5: Norway (ranked 1st, 90.9%), Sweden (ranked 2nd, 89.2%), Denmark (ranked 3rd, 84.2%) and Finland (ranked 5th, 83.5%). In terms of changes, 6 of the previous nations in the Top 10 are still in the Top10 (Norway, Sweden, Netherlands, Australia, New Zealand & Japan).

Worldwide map that fits well with this article
Worldwide map that fits well with this article

Conclusion

In conclusion, Scandinavia and Oceania are still leaders in term of Internet Penetration rate while nations such as the Four Asian Tigers (South Korea, Singapore, Hong Kong & Taiwan) should improve their position in the next few years even though the new ranking did not revealed strong improvements. However, even though this macroeconomic indicator is quite reliable to reflect a nation’s innovation, it is important to note that it tends to favor nations where the population is highly concentrated in urban areas. In this way, this ranking is a good complement to my post entitled The 10 Most Hi-Tech Cities in the World.

Happy new year to everyone and feel free to express what you think of this new ranking?

Jean-Francois Belisle

P.S.: The following blog post entitled Worlwide Internet Penetration Rate Part 3 is an update of both this post and this ranking.

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Canada in the Worldwide Top 3 for Internet Penetration Rate

As a follow-up to my last post entitled The 10 Most Hi-Tech Cities in the World, I was thinking about another simple and easy-to-understand ranking that could impress, destabilize, or even wake up, for a single minute, a curious audience in a business happy-hour cocktail. While preparing myself for a Macromarketing Conference, I ended up discovering interesting findings concerning one of the most important macroeconomic indicators of innovation: “the Internet penetration rate”. Personally, my Top 3 ranking would certainly have included countries such as South Korea, Japan or Singapore. However, strangely, while looking at The Internet World Stats database I ended up being exposed to results that surprised me. I decided to compile my own Top 30 countries with the highest Internet penetration rate for nations with more than a million individuals:

1. Netherlands – 90.1%;
2. Norway – 87.7%;
3. Canada – 84.3%;
4. New Zealand – 80.5%;
5. Australia – 79.4%;
6. Sweden – 77.4%;
7. Japan – 73.8%;
8. Portugal – 72.9%;
9. Israel – 72.8%;
10. United States – 72.3%;
11. South Korea – 70.7%;
12. Hong Kong – 69.5%;
13. Switzerland – 69.0%;
14. Denmark – 68.6%;
15. Finland – 68.6%;
16. United Kingdom – 68.6%;
17. Taiwan – 67.2%;
18. Slovenia – 64.8%;
19. Germany – 63.8%;
20. Spain – 63.3%;
21. Belarus – 61.9%;
22. Italy – 59.7%;
23. Estonia – 59.7%;
24. Malaysia – 59.0%;
25. Singapore – 58.6%;
26. France – 58.1%;
27. Austria – 56.7%;
28. Bulgaria – 55.1%;
29. Romania – 53.9%;
30. Jamaica – 53.5%.

The penetration rates for the Top 5 countries were not that surprising: Netherlands (90.1%), Norway (87.7%), Canada (84.3%), New Zealand (80.5%), and Australia (79.4%). However, what was most surprising is the low Internet penetration rate for what I thought would be the Top 3, that is to say, Japan (ranked 7th, 73.8%), South Korea (ranked 11h, 70.7%), and Singapore (ranked 25h, 58.6%; for some reasons explaining the low penetration rate of Singapore, I would refer to Chandler Nguyen’s blog). Moreover, the extent of rural regions, the importance of traditions and the high number of individuals older than 65 years old are amongst the reasons that could explain low results for the Old Europe countries such as Germany (ranked 19th, 63.8%), Italy (ranked 22nd, 59,7%) and France (ranked 26th, 58.1%). A map summary from The Internet World Stats database concerning the Internet penetration rate by country for 2007, is proposed in the figure below.

Worldwide Internet Penetration Rate by Country in 2007
Worldwide Internet Penetration Rate by Country in 2007

In conclusion, after reading this post, I hope you’ll network a little more during your next business happy-hour cocktail, but be careful and stay alert to be sure that your new knowledge doesn’t make you a strong candidate for closing the bar…

Jean-Francois Belisle

P.S.: The following blog post entitled Top 30 for Internet Penetration Rate in 2010 is an update of both this post and this ranking.

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