How This Poor Country Offers Some of World's Best Internet
WHY YOU SHOULD CARE
Because the rest of the world could learn a lot from Moldova.
By James Watkins
It’s the ultimate First World problem: When your video call freezes for a few seconds, the picture goes all grainy or the person on the other end suddenly sounds like a hyperspeed robot for a few seconds. This is to be expected when FaceTiming across the U.S., let alone to other countries. So when launching a Skype video call to Moldova, Europe’s poorest country with a per capita GDP less than that of the Republic of the Congo, I wasn’t too hopeful.
But my Skype call to Moldova was gloriously smooth — in full HD without a single glitch for the entire half hour. In fact, my Moldovan interview subject had an internet speed far faster than my own in Silicon Valley, the tech capital of the world (his download speed in Chișinău, the Moldovan capital, a remarkable 195 Mbps; mine in Mountain View, California, a measly 48). Because, believe it or not:
Moldova has the third-best coverage of superfast internet in the world.
Specifically, 90 percent of Moldova’s 3 million people have access to superfast gigabit internet access (speeds of up to one gigabyte per second). The only two countries with better coverage are Singapore and South Korea, both vastly richer than Moldova and more urbanized (cities are easier to connect with fiber optic cables than rural areas). The United States is twice as urbanized as Moldova; its gigabit coverage is just 18 percent of the population. All the other countries in the top 10 for gigabit coverage are in the club of the 40 richest nations on earth. Moldova? It’s not even in the top 120 richest countries.
So what gives? How does this poor former Soviet country compete with the best of the online world?
While Moldova’s internet infrastructure is world-leading, its penetration rates are nothing to write home about …
Well, “a very large country or region is more likely to have a smaller percentage of that population located within access to gigabit internet service, and vice versa for smaller countries,” explains Sameh Yamany, chief technology officer of Viavi Solutions, the company behind the Gigabit Monitor, which compiles the global gigabit coverage stats. But size isn’t everything — there are plenty of much richer countries of a similar size or smaller that don’t even come close to Moldova’s connectivity, including Luxembourg, Taiwan and even Europe’s tech-obsessed hub, Estonia.
Since the breakup of the Soviet Union in 1991, Moldova has been the recipient of hundreds of millions of dollars of grants and loans to support its economic development and tackle high poverty rates. In the late 2000s, one of the conditions of a World Bank development package was the privatization of telecoms. In 2009, a fiber optic cable was laid across the river that separates the country from its western neighbor, Romania, and the newly competitive market led to a relatively rapid connection of 99 percent of Moldovan communities to the fiber optic network, explains Iurie Țurcanu, the chief digital officer of the country’s e-Government Center, which works to digitize all public services. Now Moldova is also connected directly by fiber optic cable to Frankfurt, a major European digital intersection. Though the country officially has 14 internet service providers (ISPs), the largest, Moldtelecom, is a state-owned company with around 60 percent market share.
Meanwhile, “the demand side of things was created by migration,” suggests Țurcanu. Moldova has an acute emigration problem, with hundreds of thousands of its citizens — by some estimates more than a quarter of the population — living and working abroad in Russia and elsewhere in Europe, often illegally, making the country’s economy one of the most dependent on remittances in the world. “In many cases, the first thing [people who leave] do is buy a computer and send it home for people to connect through Skype. … Therefore they need an internet connection,” says Țurcanu.
But while Moldova’s internet infrastructure is world-leading, its penetration rates (the proportion of people regularly connecting to the internet) are nothing to write home about, according to data from the International Telecommunications Union, with about 71 percent of people going online on any device in a given year — similar to rates in Portugal and Argentina and slightly lower than those in the United States. That’s probably more because “the cost of buying a computer is quite a high barrier, not the cost of the internet itself,” says Vlad Manoil, chief reengineering officer at the e-Government Center. In Chișinău, an internet subscription tends to be around $12 per month.
So is the World Bank–inspired internet revolution actually boosting development in Moldova? Aided by its connectivity, the country has recently become a destination for the outsourcing of IT and call center jobs, especially for Italian companies (Italian is a common second language for Moldovans). Poverty rates have been steadily declining for several years, from 30 percent in 2003 to less than 10 percent today. That might not all be attributable to the superfast internet, but it sure helps facilitate the perfect Skype call.