The Index combines eleven major indicators into a single measure, to form an overall benchmarking figure that can be used to compare different countries on a level playing field.  These indicators take into account the amount of households with a computer, as well as the number of internet users and the relative literacy of those users, both on an ICT level and in terms of education, and rates of fixed line and mobile telephone penetration.

Having placed 21st in this list in the 2002 study, Luxembourg now finds itself in 7th position, easily making it the most significant climber in the upper echelons of the table, as well as posting the largest increase in IDI value. The improvement can be explained by several factors, but among these, the penetration of mobile broadband is key. While this service was not available in some countries with otherwise state of the art ICT infrastructure up to the end of the surveyed timeframe, such as Iceland (which fell from 2nd to 5th), the Grand Duchy’s mobile broadband penetration as of 2007 was as high as 43%. To put this in perspective, the average across the rest of the top 20 didn’t even touch 25%. Moreover, general Internet penetration increased from 40% to 78% over the same five year period, with household computer ownership jumping from 53% to 80%.

While the number of fixed line telephone subscriptions has decreased somewhat, in line with trends in other countries with high levels of technological development and strong Gross National Income (GNI) per capita, Luxembourg’s cellular penetration has remained above and beyond levels recorded in other countries, a factor explained by the nature of the workforce as much as anything else.

ICT Costs: a valuable indicator

In the words of the report detailing ITU’s IDI, “a successful and vibrant Information Society needs to be within its people’s means”. Thus, an analysis of costs is paramount to gauge the level of ITC development within a nation. As well as surveying the cost to the consumer of ITC services, the price analysis of ICT services will, in the future, show another indicator of development: the change in costs over time. Before it becomes widespread, an ICT must become affordable and move out of its niche market. In this ICT price basket, the costs of fixed line telephony, cellular telephony and fixed line broadband were taken into account in each country and averaged to give a single figure as a proportion of GNI per capita.

 Clearly, the trend is that price comes down across the ICT board, and profit margins and technological upgrades are maintained by an increase in the customer base. In general, the more developed an ICT framework is in a country, the lower costs will be as a proportion of GNI per capita. Similarly, the more developed the ICT services are, the higher GNI per capita is likely to be. While the average across the 154 countries surveyed showed the cost of the basket to equate to 15% of GNI per capita, this figure varies from an average of 1.6% in developed countries, to 20% in developing ones. Luxembourg’s figure of 0.5% illustrates its high development across different ICTs, and is low enough to place it 3rd in the list for ICT affordability, behind Singapore and the United States respectively.  Because this is the first such price basket created by ITU there is no exact comparison that can be made with 2002 figures.

Luxembourg’s dramatic ascent up the IDI league table suggests a nation that is starting to adopt new technologies as they roll out of research and development departments, and is embracing them as they become mainstream. The affordability rate only corroborates this.