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Data prices fall in Africa but it's not enough says A4AI

Data prices fall in Africa but it's not enough says A4AI

The cost of mobile data for consumers in low and middle-income countries has fallen across all regions, driven by, among others, falling broadband prices, according to new research from the Alliance for Affordable Internet (A4AI), an initiative of the Web Foundation.

A4AI says low-income countries saw the most improvement, which is described as an historic reversal with progress of poorer countries previously lagging behind middle-income countries.

According to the research, falling broadband prices has driven affordability in certain African countries. The average cost for 1GB data as a percentage of average monthly income declined by 11%, from 5.8% of average monthly income in 2018 to 4.7% today.

In Sierra Leone, the relative cost of 1GB data tumbled from 25.9% to 9.9% after the introduction of a number of more affordable data plans by the largest operator. In Burkina Faso, reduced prices halved the cost of 1GB from 14.8% to 7.8% of monthly income. In countries such as Zimbabwe, a rise in incomes made broadband data more affordable, dropping relative cost from 19.8% to 10.1% of monthly income.

A4AI adds that declining costs meant seven new countries reached the international threshold of affordability for the first time in 2019, making internet affordable for most people, including those at below average income levels in Algeria, Bangladesh, Cabo Verde, Colombia, Ecuador, Namibia, and Paraguay.

A4AI developed the 1 for 2 affordability target - meaning 1GB of data should cost no more than 2% of average monthly income in order to be affordable for most people. To date, the target has been adopted by the UN Broadband Commission, the Economic Commission of West African States (ECOWAS), Nigeria, and Ghana.

Of the 100 countries included in this study, only 37 meet the 1 for 2 target. The total population of the remaining 63 countries tops 1 billion people, meaning over 1 billion people live in countries that do not meet the affordability target.

In Africa, currently only 9 countries meet this target: Egypt, Mauritius, Gabon, Tunisia, Botswana, Nigeria, Namibia, Algeria, and Sudan.

Only 24% online

Because high costs keep people offline, the countries and regions with the least affordable data are also those with the fewest people connected to the internet, the A4AI claims. In Africa, where data is the least affordable at 7.1% of average monthly income, only 24% of the population is online, compared with 51% globally.

A4AI puts this in perspective and says 4 out of every 5 people living in countries with unaffordable data live somewhere in Africa.

"This demonstrates that affordability is a particularly deep challenge for the region in confronting the digital divide and requires African policymakers to step up and connect their countries into the global economy. The cost of data remains prohibitively high for many across Africa," the organisation continues.

While progress has been made, the cost of broadband is prohibitively high.

A4AI says the average African earner must pay 7.1% of their monthly income for 1GB of data. Here average monthly income is based on GNI/capita/month for 2018. Translated to a US context, where the average earner earns US$62,850 (GNI per capita), 1GB of data would cost US$373 on average (7.1% of GNI per capita/12).

As more people, including more women, can afford to come online, national economies will grow. For every 1% increase in the number of people using mobile broadband, countries will see a 0.15% increase in GDP, according to the ITU.

Dhanaraj Thakur, Research Director of A4AI and Web Foundation, said: "Access to a meaningful internet connection means access to transformational and life-changing tools. This notable drop in costs, especially across Africa, will make it easier for millions around the world to benefit from internet access. While we welcome this progress, millions remain offline because they cannot afford the cost of data. Urgent action is required - failure to deliver affordable internet access will drive inequality as those offline are further pushed to the margins of society."

The A4AI says while regions do differ and the range of policy decisions will affect the price of the internet, research shows that countries that prioritise a clear national broadband plan, invest heavily in universal and public access, and effectively and transparently allocate spectrum see the greatest gains in internet affordability.

"Governments must take urgent action to make internet access affordable for more people. By improving competition in telecommunications markets and investing in public access solutions in places like libraries, schools, and community centres, governments can lower the cost to connect and in turn bring more people online," the organistion states.

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