Fight to lower cost of Internet access in Africa

·29 Mar 2014

In terms of widening Internet use, Africa faces several challenges including lowering the cost of both data use and device costs.

The Alliance for Affordable Internet has sunk its teeth into getting developing country Internet prices down, Russell Southwood spoke to its Executive Director Sonia Jorge about the challenges and how she will tackle them.

The Alliance for Affordable Internet (A4AI) was set up as a coalition of private sector, public sector, and civil society organizations to focus on bringing down the cost of Internet use globally, particularly in poorer countries.

Its Honorary Chairperson is Dr Bitange Ndemo, former Permanent Secretary, Ministry of Information and Communications, Kenya and its Executive Director is Sonia Jorge. She was previously Director of Research and Consulting at Pyramid Research.

What brought this very wide and diverse grouping together to look at this issue?

The overall objective was to have a coalition of global players to focus on policy and regulation reform to facilitate the process of bringing down Internet prices. There’s still a lot of work to be done at the Policy and Regulatory level and we are one of several efforts across the globe to push prices down.

A lot of that reform needs be informed by the variety of perspectives represented in the coalition – the public sector, the private sector, civil society, and academia – because we need a strong evidence base with wide backing.

We are working with this multi-stakeholder approach at a country level for affordable Internet. In terms of research, we’re looking at where there are key gaps and seeking to fill them as well as publicizing good practices.

You have a specific target in price terms?

We have a reference target of contributing to achieving the UN Broadband Commission’s objective of Internet access costing 5% of per capita income. This reference point is important for A4AI but it doesn’t mean we’ll be satisfied achieving it everywhere.

It’s not as low as we would like to but it’s a good starting point in developing countries which are very much behind in this area. The 5% mark would be a great achievement but we want to work to go further than that.

So give us some comparisons between Africa and the rest of the world in terms of the 5% figure….

The ITU has done the research and in developing countries globally, fixed broadband is 1.7% of per capita income and for mobile broadband, 1.4%. By contrast, for developing countries globally, fixed broadband is 30.1% of per capita income and 11-25% for mobile broadband. The variation in the latter depends on which plan you take out.

So if we look at the same figures in terms of specific countries for mobile broadband, in Mozambique it is 66% of per capita income; 26-48% in the Dominican Republic; 45% in China on a post-paid plan and 13-20% in Nigeria.

In Africa, affordability is far from being obtained and tends to be in the range of 20-30%. There are similar high costs in South East Asia and some countries in Latin America. All have very different realities but we’re not satisfied with what’s been achieved.

But how does that look for the people who are on US$2 a day?

This is a very large part of the global population and for them Internet prices at 5% of per capita income does still not make it affordable. Some examples again are useful:

China’s fixed broadband costs for this group are 38% and 25% for mobile broadband; in Colombia 30% for fixed and 48.9% for mobile broadband; Nigeria 46% for fixed and 21% for mobile broadband and Zambia 13.5% for fixed and 35% for mobile broadband.

Overall, mobile broadband costs are very high for the countries we looked at in this piece of research.

So how will you actually help bring prices down?

We are very much focusing on policy and regulatory reform that will allow prices to be reduced. All A4AI members – including country members – have endorsed our best practice recommendations and Government, the Private Sector and Civil Society are all involved.

We need to answer: What does it mean to have a healthy competitive market? Do the competitive dynamics work to push prices down? We need to have policy and regulatory frameworks ensuring this and to incentivize players to compete in lowering prices.

The second piece of what we need to do is to lower the cost structures in the industries, allowing them to pass on savings to the consumers. There is a string link between the cost structure and prices.

Those are the strategic arguments but how does this work in practice?

Through a very strong and clear infrastructure sharing framework to help reduce the investment required. But not only that but through sharing at the operational level. Experience shows that costs can be reduced and users benefit.

Mobile broadband is a very key element in delivering Internet in developing countries, particularly Africa. So another critical cost reduction areas is lowering the cost of mobile services.

We want to reduce the cost of spectrum and associated fees and through innovative uses of spectrum and other means find cost reductions.

It needs to be possible for there to be experimentation and innovation that offer different options that will lead to lower prices. We need to support this kind of innovation.

What kind of innovation do you have in mind? Things like TV White Spaces?

TV White Spaces could be one thing, if the experiments show that increased adoption would lead to lower prices.

But it might also include low cost base stations and there are a number of companies pursuing this approach. There’s also things like solar base stations to lower energy costs.

How will you spread best practice?

One thing we’re planning to do globally this year is to facilitate regional meetings for the sharing of experiences and best practices and we’ll be holding one of those events in Africa, bringing together countries we’re working with and other successful countries to do just that.