eServices as Pull Strategies within Public Private Partnerships - Evidence from Case Studies

Christoph Lattemann, Sören Kupke, Anna-Maria Schneider, Stefan Stieglitz Chair for Corporate Governance and E-Commerce University of Potsdam, 14482 Potsdam Phone: 0049 (0) 331/977 38 39 Fax: 0049 (0) 331 977 33 75 eMail: lattema|kupke|annschne|[email protected] Abstract Broadband access plays a major role for the economic growth, and for the social, and cultural development of urban areas as well as for rural regions. In case of market failure in the broadband sector, Public Private Partnerships (PPP), respectively Private Finance Initiatives (so called in the UK), can be a powerful tool to encourage the deployment of broadband infrastrucutre. The market failure within the broadband sector emerges often in regions with a low density of population and weak economic conditions. A provision of broadband infrastructure and services in such areas is not attractive to private investments because of a low or even negative expected rate on return on investment (ROI). Thus, PPPs promise to be an attractive and applicable tool to overcome market failure and to enforce broadband diffusion. But the development and implementation of broadband infrastructure do not induce demand of the customers by itself. Case studies from ‘broadband-PPPs’ from different countries show that the provision of additional eServices, especially value added eServices from local players and the active involvement of local public institutions (hospitals, schools, etc.) enforces the use of broadband technologies. Therefore, this contribution aims to encourage the discussion about successful strategies of PPPs within the broadband sector. For this reason, the distribution strategies of PPP projects will be validated by the analysis of eight PPP case studies from the broadband sector from Sweden, Great Britain, and France. Keyword: Public Private Partnership, Broadband Diffusion, Rural Areas, eServices JEL Classification: O33