The health crisis of the last 18 months emphasised the growing importance of data communications and highlighted the opportunities for impact investors in providing infrastructure, experts agreed at Real Asset Media´s Infrastructure Summit: Digital & Telecoms, which took place online yesterday on the REALX.Global platform.
“COVID 19 pandemic has demonstrated that Internet access is vital for access to jobs through education, ensuring freedom of expression and access to information, and the basic infrastructure is what drives this access,” said Kuutti Kilpeläinen, investment manager, digital infrastructure & solutions, Finnfund.
“It’s becoming even more important in emerging markets and frontier market,” he added.
“A lot of investments are still needed to enable access to basic mobile services, and more affordable higher speed internet.”
He explained that less than 50% of people have mobile or internet connection in Sub-Saharan Africa and less than 60% in Asia Pacific: “The opportunity is huge.”
He said that Covid has acted as a major wake-up call, and showcased the importance of connectivity. “The focus is clearly now on connecting the unconnected, and solving the bottlenecks in basic infrastructure,” Kilpeläinen said.
Infrastructure activity ratcheted up during the pandemic
“From both an investment and an investor perspective, it was a busy sector before the pandemic and that has, has ratcheted up very significantly,” Whitehelm Capitalhead of business development Tom Maher said.
Maher added that in developed markets there is also considerable pressure to improve internet penetration in order to decrease the digital divide. “There is a really important social element to the investments that we’re doing and in making sure that we are providing sensibly priced accessible fibre to all parts of society.”
Glasgow City Council’s head of digital economy Anne McLister said that although over the last 18 months governments have thrown a lot of money at equipment, training, and connectivity to help people get online, she said her biggest concern is that this is capital funding. “It’s a moment in time, it’s not a continuous service. So what happens when the money runs out.”
She said that while local authorities “can’t bring money to the party” they can act as good and willing partners to infrastructure providers.
“You can’t build fibre networks in a city without the council because you need to close the roads, dig up the roads.”
Local authorities can provide the necessary consents and Glagow has established a telecoms unit in order to expedite this process.
But she added, “we need to get better at how we can participate and be a partner in this, in order for our citizens to have access because availability of connectivity is not the key, it’s access through affordability.”