‘Internet access should not be a luxury’

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If the average US earner paid 7.12% of their income for access, 1GB data would cost $373 per month.
If the average US earner paid 7.12% of their income for access, 1GB data would cost $373 per month.

Across Africa, the average cost of 1GB mobile data is 7.12% of the average monthly salary, soaring to as much as 20% in some countries.

This is the finding of the 2019 affordability report issued by the Alliance for Affordable Internet (A4AI), showing that for the 50% of the world unable to connect, affordability remains the greatest barrier.

Analysis from A4AI finds that if the average US earner paid 7.12% of their income for access, 1GB data would cost $373 per month.

A4AI is a global coalition that advocates affordable broadband for all. It was created with the goal of obtaining global broadband Internet access priced at less than 5% of average per capita income globally – the target of the UN Broadband Commission.

The World Wide Web Foundation serves as the secretariat of A4AI. Major members of the coalition include Google, USAID, Facebook, Cisco, Intel, Microsoft, UN Women and many others from the public, private and civil society sectors.

The correlation of ADI 2019 and mobile broadband affordability for 2018. (Source: A4AI)
The correlation of ADI 2019 and mobile broadband affordability for 2018. (Source: A4AI)

In terms of this year’s Affordability Drivers Index (ADI), the report highlights that low-income countries made impressive strides towards affordability.

A4AI uses the ADI to assess how well a country’s policy, regulatory and overall supply-side environment is positioned to lower industry costs and ultimately create more affordable broadband. The index does not measure actual broadband prices, nor does it reveal how affordable broadband is in a given country.

“The most positive trend in this year’s ADI is the progress made by low-income countries. These countries, on average, improved their scores three times as much as middle-income countries, with a 15.6% increase from 2018 to 2019, compared to just 4.5% and 5.1% in lower-middle and upper-middle-income countries, respectively,” it states.

The report cites a diverse range of policy changes and infrastructure investments as reasons for improvements. “New national broadband plans in Cameroon and Mali led both to the top of the list of most improved countries.” The Philippines saw the introduction of mandatory public consultations in regulatory decision-making.

Competitive conditions

According to the report, out of the 136 low- and middle-income countries studied, only 65 have fully competitive markets.

It cites that consolidated broadband markets are keeping prices high and putting Internet access out of reach for hundreds of millions of people.

Furthermore, people living in countries with consolidated broadband markets pay $3.42 more per GB of mobile data than those in similar countries with competitive markets. “Around 900 million people currently live in countries where the cost of Internet access is kept high by consolidated markets.”

A4AI stresses that when people have no option to switch providers, they are likely to pay inflated prices for mobile data.

Number of major mobile broadband network operators per country. (Source: GSMA Intelligence)
Number of major mobile broadband network operators per country. (Source: GSMA Intelligence)

In SA, regulatory bodies decided to launch investigations into mobile broadband prices, following uproar on social media under the banner #DataMustFall

In July 2017, the Independent Communications Authority of South Africa (ICASA) began its inquiry into the cost to communicate in the country. In August that year, the Competition Commission (CompCom) also announced it would run an inquiry into the high price of data services in SA.

The CompCom’s provisional report confirmed SA's data prices are too high, anti-poor and retail price structures lack transparency.

The commission used existing international comparisons on mobile prepaid data prices, including that of the International Telecommunication Union, Tarifica, ICASA and Research ICT Africa.

It found that relative to a 1GB data bundle, a consumer buying a 100MB data bundle will pay roughly twice the price on a per MB basis for the same data period validity. A consumer buying a 50MB bundle will pay up to three times more, and a 20MB bundle up to four times more per MB.

In addition, the commission found SA ranks poorly relative to other African countries and its BRICS peers.

Breaking barriers

To address the barriers, A4AI recommends governments use their policy and regulatory powers to build competitive broadband markets that provide users with lower costs and high-quality services.

Sonia Jorge, executive director for A4AI, says it remains clear there is a need to raise the bar on Internet access. “Despite progress, far too many people remain offline, mostly in low- and middle-income countries. Even among those connected, there is a wide disparity in the quality of Internet they access.”

A4AI puts forward three core focus areas to support healthy broadband markets, and that is to firstly shape a competitive market environment for broadband.

“In robust and competitive markets, operators face more pressure to innovate and provide value. Governments can help by setting fair and clear market rules for entry into the market, with clear licensing requirements for traditional providers and community networks. Policymakers should support robust operating rules, and regulators should provide regulatory certainty for service providers to help their long-term planning and encourage network investments.

Secondly, support of affordable backhaul and infrastructure. “Access to backhaul connectivity must be affordable so that additional service providers are able to enter the market, providing more competition.

“Regulators and policymakers play a key role in facilitating infrastructure-sharing among operators, investing in high-capacity backhaul networks, and allocating spectrum in a fair and transparent way.”

Lastly, A4AI encourages investment in public access options to complement markets. “Public access and community networks complement the commercial market. They supply access where there are market gaps, expand connectivity to more people, build digital skills in new communities, and cultivate demand for Internet access.

“They can also increase competition by providing more choice to consumers, which adds pressure for operators to improve services and lower prices.”

The A4AI report concludes that failure to build and sustain competitive markets will push up broadband prices and undermine efforts to get everyone online – preventing millions of people from accessing the Internet’s economic, social and creative opportunities.

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