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Technology Africans pay more for internet access due to lack of competition

20:40  22 october  2019
20:40  22 october  2019 Source:   qz.com

Expensive broadband is pricing millions out of accessing the internet

  Expensive broadband is pricing millions out of accessing the internet In countries with just one major broadband provider, internet access is often too pricey for people to justify, a new report shows.The internet affordability report, published annually by Tim Berners-Lee's Web Foundation and the Alliance for Affordable Internet, offers a snapshot of the barriers to people being able to afford to get online. In 2019, the report identifies a lack of competition in the market as one of the factors keeping costs too high in some countries.

Africans are still paying way too much for their internet access due to a myriad of challenges including infrastructure investment and weak competitive environments in local markets.

  Africans pay more for internet access due to lack of competition © Provided by Atlantic Media, Inc.

Getting all Africans online by 2030 will require around $100 billion in investment with a majority of that sum pegged for infrastructure-based spending. But most African countries do not currently have policy environments needed to make that spending worthwhile, according to the latest broadband affordability report by the Alliance for Affordable Internet (A4AI). The report analyzes the current ability of national policies to “lower industry costs and ultimately create more affordable broadband.”

Africa needs $100 billion to for universal internet by 2030

  Africa needs $100 billion to for universal internet by 2030 The affordability and quality of service issue is a pain point that effects ordinary consumers and entrepreneurs alike across Africa. Quartz Africa Innovator 2019 honoree, Odunayo Eweniyi, co-founder of PiggyVest, a Lagos-based fintech startup, emphasized the huge gap between what ordinary Africans earn and the relative cost of internet access when she spoke at the launch of the report during the World Bank fall meetings in Washington D.C. this week. Eweniyi was also concerned with the poor connection speeds and overall inconsistent quality.

More African countries are again in the bottom half of the Affordability Drivers Index scores than in the top half. One primary reason, the report notes, is the lack of competitive markets which are home to multiple broadband operators.

a screenshot of a cell phone© Provided by Atlantic Media, Inc.

The impact of the lack of competition is reflected in the high costs of internet access on the continent with the average price for one gigabyte of data costing 7.12% of the average monthly salary—much higher than the defined affordability benchmark of 2% of average income.

On average, A4AI analysis estimates users in countries lacking significant competition, also referred to as “consolidated markets”, pay an extra $3.40 more per gigabyte for mobile data.

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As it turns out there are more “consolidated markets” in Africa than in every other continent globally. One prominent example is Ethiopia, Africa’s second most populous country, where the state-owned telecoms company has a long-running monopoly on the market. Reflecting the relationship between competitive markets and broadband affordability, Ethiopia is ranked as the second-worst on the affordability index, only ahead of war-torn Yemen.

a screenshot of a cell phone© Provided by Atlantic Media, Inc.

A4AI’s findings corroborate an Ecobank Research report released last year which showed a link between the number of mobile network operators in a country and the local data prices with competition driving down prices, as seen in Nigeria. While the price of one gigabyte of data is higher in countries with only two networks, it’s much lower in markets with more competing rival networks, it found.

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a screenshot of a cell phone© Provided by Atlantic Media, Inc.

“In terms of competition, gaps exist. We need to change that equation [because] the only way users benefit is to have multiple players in the market,” says Sonia Jorge A4AI’s executive director. “We don’t think that it’s a cool idea to have people come online just because. It’s mostly because [getting connected] is transformational.

One bright note is that two African countries—Cameroon and Mali—top the list of countries making the most progress in improving broadband affordability. But, as that progress is mostly down to updating national broadband plans, it’s a job half-done “because policy is not enough if we don’t see the impact of policy,” Jorge says.

Worst ranked countries on broadband Affordability Drivers Index
Malawi
Zimbabwe
Sudan
Nicaragua
Liberia
Sierra Leone
Democratic Republic of Congo
Haiti
Ethiopia
Yemen
Source: A4A

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Top Chinese State-Media Editor Complains About Internet Access, Deletes Post.
It’s well known that China’s Great Firewall blocks access to Google, Facebook and Twitter. But it’s rare for senior figures in China to openly complain about internet access, much less the editor-in-chief of one of China’s most prolific state-run newspapers. “Accessing external internet is extremely difficult as China’s National Day holiday is upcoming,” Hu Xijin, who runs the Communist Party-backed Global Times newspaper, posted on China’s Twitter-like microblogging service Weibo on Wednesday. “Even Global Times’s work is being affected.

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