Tuesday, January 07, 2020 /2:15 PM / By FDC / Header Image Credit: biztechafrica
Consumers in African countries are paying some of the highest rates in the world for internet access as a proportion of income, according to a new report released in late October. The Alliance for Affordable Internet (A4AI) assessed 136 low and middle-income countries for their annual Affordability Report. Examples of middle-income countries according to the report include Malaysia, Colombia, India, Jamaica, South Africa, and Ghana, while low income countries were Nepal, Mali, Haiti, Liberia, Yemen, and Mozambique.
The A4AI is an initiative of the Web Foundation, founded by inventor of the Web Tim Berners-Lee, with partner organizations that include Google and Facebook. The A4AI defines affordability as 1GB of mobile broadband data costing no more than 2% of average monthly income. But the average across the African continent is 7.12%, and in some cases 1GB costs more than a fifth of average earnings.
Such prices are "too expensive for all but the wealthiest few," the report states, citing cost as the primary reason why an estimated 49% of the global population remains offline. The report authors argue that sluggish markets and monopolies are a primary cause of high prices and offer several policy prescriptions to address the issue. African countries are subject to the least affordable internet prices in the world, according to A4AI data.
Citizens of Chad, DR Congo, and the Central African Republic must all pay more than 20% of average earnings for 1GB of mobile broadband data. By contrast, the most affordable rates in the continent are in Egypt at 0.5% and Mauritius at 0.59%. Overall, the report found that costs are falling faster in low-income countries than middle-income counterparts, but in many cases prices remain prohibitive. A4AI's primary recommendation is for greater liberalization of markets and measures to increase competitiveness. "Competition is core to successful broadband markets," the report states.
The authors' estimate that moving from "consolidated markets" -- monopolies -- to multi-operator markets could drastically reduce costs of mobile broadband data. Recommended measures to increase competition include "fair rules for market entry and incentives to encourage new competitors," such as a liberal and transparent licensing regime. A4AI has also created a Good Practices Database with case studies of low and middle-income countries improving access, such as Namibia, which has allowed new service providers to enter the market and seen costs decline. Kenya was also cited for making internet access available for millions of its citizens by eliminating a tax on handsets.