into the lowest 30% of the world's population Lower rates towards near zero tariffs of < 0.01 euro/session pushes usage into the sub-USD 2 2000/year incomes in the Big 5, Vietnam, etc., adding 1 billion more new users Expansion of middle class with economic development in NICs drives expansion in 2 Bn users, 2006/7 China, India, Indonesia, also Thailand and Latin Amerida as 1.5 Bn new consumers 1.5 Bn users, 2004 broach the USD 2 500-USD 3 000/year income levels 800 K users, 2000 NB: Confidence in estimates reduces with time massive new consumer market in the years up to 2015 created by the expansion of disposable incomes principally in China and India, but also in Brazil and other Latin American economies, and possibly also in Russia and Indonesia. The main trend - expansion in demand with rising income and price falls In general we can say that the main trend in demand for telecommunications that will drive infrastructure is a massive expansion of demand globally from developing countries, firstly as incomes increase to around the USD 3 000 level. Secondly we can expect take-up for those below this income level, as prices fall. This is summarised in the following figure in terms of Dupuit curves for the take-up of public services. We can expect three phases - early takeoff in the OECD community followed by the growth of the middle class in the developing world. Falling prices drive entry to a further phase of expansion - those with incomes below USD 2 000. However demand has been found to be non-linear and to expand suddenly at a certain price point³5 - the perception of freeness whereby the consumer perceives that calls are effectively free and will be used without constraints due to cost. INFRASTRUCTURE TO 2030: TELECOM, LAND TRANSPORT, WATER AND ELECTRICITY - ISBN 92-64-02398-4 © OECD 2006 2. TELECOMS INFRASTRUCTURE TO 2030 Figure 2.7. Demand takes off at a certain price point - the perception of freeness User population numbers against base price trends - user population size is driven by costs of services 