BT, The Value of Broadband Innovation __________________________________
The value of innovation to the consumer is not captured by standard accounting techniques. In a 2004 study, Volterra applied newly developed techniques to assess the value of Broadband to UK users.
The study, which was commissioned by BT, drew upon considerable theoretical and empirical work carried out in the United States.
Volterra estimated that at the current market size, the gains were of the order of £300m per year. Based on realistic assumptions about the take up of broadband, we predicted that this could rise to £2bn a year by 2010 and £4bn by 2020. These numbers represent 0.2% and 0.4% respectively of UK's output. This is significant.
This compares with estimates in the US where the value of cell phones is estimated to be about 1% of America's output. However, cell phones are an individual product while broadband is used by households and businesses and the value is therefore less widespread.
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