Ict, e-business and Small and Medium Enterprises

General framework policies for SMEs 

Network infrastructure 

Network infrastructure must be in place. The availability of a wide range of high quality Internet 

and communication services at competitive prices is particularly important, as this allows firms to choose 

services appropriate to their needs. In particular, broadband, characterised by high-speed, “always-on” 

connection and two-way capability, allows faster access and delivery of existing on-line services and new 

applications and services such as streaming audio and video over the Internet with much higher quality. In 

this context, an additional focus on the wireless network infrastructure and the rapid growth of WiFi are 

also important.  

The price and availability of broadband access depends to a large extent on competition in the 

infrastructure market and will in turn play an important part in take-up by SMEs. Policies to open up 

incumbent local access networks to competition (e.g. unbundling local loops and line sharing) create 

incentives for new investment in broadband access and drive faster deployment of broadband services 

(OECD, 2001c). From 1997 to 2001, 26 OECD countries introduced or decided to introduce unbundling. 

Unmetered pricing is also important for wider use of broadband. High-speed services are advantageous 

when priced on a flat-rate monthly basis and service is “always on” (OECD, 2001b).  

Governments should also ensure open and competitive telecommunication markets so that SMEs 

can choose among various technologies and services for high-speed Internet access. While some large 

firms use directly connected leased circuits for broadband applications, smaller enterprises are likely to 

prefer technologies using a traditional telephone line, such as DSL, as these generally represent the initial 

opportunity for SMEs to obtain affordable higher speed Internet connections (OECD, 2001b). In 

developing countries, multi-user services can be a very important tool for increasing coverage and use of 

advanced services and could be supported where universal service is difficult to attain (see E-Choupal 

example in Box 2).