Internet connectivity costs and implication

Internet connectivity costs and implication

10 December 2019

 

Africa has the most expensive internet in the world. The Africa Alliance for Affordable Internet (A4AI) measures internet data prices in 100 countries and defines internet as being affordable when 1GB of mobile data is priced at no more than 2% of average income. Africa falls far short, as 1GB costs 8% of average income across the continent. Other developing regions fare better such as Americas (2.7%) and Asia (1.5%).

So why is internet so expensive in Africa? Lack of competition seems to be the main reason. A 2018 research paper by Ecobank found that African countries with four or more mobile network providers had the cheapest data costs.

The cost of internet access is dropping globally but not fast enough in Africa, resulting in a digital divide between low-income and middle-income countries globally. Consequently, Africans only make up 11.9% of the world’s internet users. Internet penetration on the continent is low, it was measured at 39.8% in June 2019, versus the world average of 57.3%.

Slow growth in internet connectivity has a negative impact on the economic growth of African countries. According to McKinsey, the Internet accounted for 21% of GDP growth in mature economies between 2006 and 2011. Additionally, the World Economic Forum estimates that a 10% increase in broadband penetration in low- and middle-income countries can result in a 1.38% increase in economic growth.

The possibilities for broadband technology and digitisation to be used as an enabler for reducing poverty, improving education, promoting gender equality, improving health services and ensuring environmental sustainability are well documented. And Africa is not maximising on these opportunities at the moment.

However, entrepreneurial interventions are emerging with multiple African businesses facilitating internet connectivity. Egyptian company Wasla, for example, has developed an incentivised mobile browser that rewards users with free mobile internet. In Kenya, Moja provides a free public Wi-Fi network, to anyone within range of the signal, enabling users to access Moja’s stored content to watch shows, listen to music or read books. With Moja, users pay to get online with their time, attention or engagement rather than with money.

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