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Ericsson: New study quantifies the impact of broadband speed on GDP

STOCKHOLM, SWEDEN — (Marketwire) — 09/27/11 —

· Doubling the broadband speed for an economy increases GDP by
0.3%.

· Research conducted by Ericsson, Arthur D. Little and Chalmers
University of Technology confirms that increased broadband speed contributes
significantly to economic growth

· Positive effects come from automated and simplified processes,
increased productivity as well as better access to basic services such as
education and health

A new report, conducted jointly by Ericsson (NASDAQ: ERIC), Arthur D. Little
and
Chalmers University of Technology in 33 OECD countries, quantifies the
isolated
impact of broadband speed, showing that doubling the broadband speed for an
economy increases GDP by 0.3%.*

A 0.3 percent GDP growth in the OECD region is equivalent to USD 126 billion.
This corresponds to more than one seventh of the average annual OECD growth
rate
in the last decade.

The study also shows that additional doublings of speed can yield growth in
excess of 0.3 percent (e.g. quadrupling of speed equals 0.6 percent GDP growth
stimulus)

Both broadband availability and speed are strong drivers in an economy. Last
year Ericsson and Arthur D. Little concluded that for every 10 percentage
point
increase in broadband penetration GDP increases by 1 percent.

This growth stems from a combination of direct, indirect and induced effects.
Direct and indirect effects provide a short to medium term stimulus to the
economy. The induced effect, which includes the creation of new services and
businesses, is the most sustainable dimension and could represent as much as
one
third of the mentioned GDP growth.

“Broadband has the power to spur economic growth by creating efficiency for
society, businesses and consumers,” says Johan Wibergh, Head of Business Unit
Networks, Ericsson. “It opens up possibilities for more advanced online
services, smarter utility services, telecommuting and telepresence. In health
care, for instance, we expect that mobile applications will be used by 500
million people.”

During a keynote speech at Broadband World Forum 2011 in Paris, Wibergh said:
“We expect a huge increase from the current estimate of around 1 billion
people
with broadband access to about 5 billion in 2016, most of whom will have
mobile
broadband. Connectivity and broadband are just a starting point for new ways
of
innovating, collaborating and socializing.”

Erik Almqvist, Director at Arthur D. Little, says: “Until now there has been
an
absence of hard facts investigating the effects of broadband speed on the
economy. This unique empirical study may help governments and other decisions
makers in society make more correct tradeoffs and policy choices.”

“These results have been derived using rigorous scientific methods where the
direction of causality, data quality and significance levels have been
appropriately tested,” says Erik Bohlin, Professor at Chalmers University of
Technology. “The results of this study support governmental policies that
recognize and promote the importance of broadband.”

This study is the first of its kind in that it quantifies the economic impact
of
increases in broadband speed in a comprehensive scientific method using
publicly
available data.

Notes to editors:

* The economic impact of average attained broadband speed, both fixed and
mobile, has been analyzed using panel data regression analysis with quarterly
data points from 2008-2010 for 33 OECD countries.

* One-directional, isolated effect.

* Countries considered in the study are Australia, Austria, Belgium, Canada,
Chile, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece,
Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Mexico, Netherlands,
New
Zealand, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden,
Switzerland, Turkey, UK and US.

* Average achieved broadband speed data provided by Ookla

Photo of Johan Wibergh is available at:

Our multimedia content is available at the broadcast room:

Ericsson is the world-s leading provider of technology and services to telecom
operators. Ericsson is the leader in 2G, 3G and 4G mobile technologies, and
provides support for networks with over 2 billion subscribers and has the
leading position in managed services. The company-s portfolio comprises mobile
and fixed network infrastructure, telecom services, software, broadband and
multimedia solutions for operators, enterprises and the media industry. The
Sony
Ericsson and ST-Ericsson joint ventures provide consumers with feature-rich
personal mobile devices.

Ericsson is advancing its vision of being the “prime driver in an all-
communicating world” through innovation, technology, and sustainable business
solutions. Working in 180 countries, more than 90,000 employees generated
revenue of SEK 203.3 billion (USD 28.2 billion) in 2010. Founded in 1876 with
the headquarters in Stockholm, Sweden, Ericsson is listed on NASDAQ OMX,
Stockholm and NASDAQ New York.

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Source: Ericsson via Thomson Reuters ONE

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