|Affordability Remains Biggest Barrier to Broadband Adoption|
Despite falling prices, consumers living in emerging markets are still paying far more for broadband than their mature market counterparts, putting it completely out of reach for the majority of them, according to research firm Ovum.
According to analyst firm Point Topic, the biggest barrier to broadband adoption around the world is affordability, but the industry is working to bring services into the reach of the digitally deprived.
Ovum recently studied broadband prices in 19 emerging markets, such as South Africa, Nigeria and Colombia, to see what has changed from its last look in 2010. The study found that while prices in most markets fell compared to 2010, broadband continued to be beyond the reach of the vast majority of emerging market consumers.
“Demand for broadband services in emerging markets continues to be stifled by high prices. In some countries, broadband pricing was double or triple the price of an equivalent service in a more developed market,” said Ovum senior analyst Richard Hurst.
“The next wave of broadband, commonly titled ‘superfast’, is gathering steam. With more than half a billion fixed lines already in use and many markets extending the reach of fixed broadband across their populations, the spectre of a deepening digital divide rears its head. On a global basis, if suppliers can shave 1% off the cost of a broadband service then that brings it into the economic reach of at least another five million households,” said Oliver Johnson, Point Topic CEO.
South Africa: Most Expensive Broadband Tariffs
Ovum found that South Africa had the most expensive broadband tariffs of the 19 countries in its sample. Entry-level services in South Africa cost as much as $1,443 per year, with the prices of high-end services up to $6,000 per year. Nigeria’s broadband tariffs were also among the most expensive in Ovum’s sample, and the country’s low GDP per capita meant that they were also some of the most unaffordable. Ovum found that lower end entry-level services cost as much as $1,211 per year in Nigeria.
National Broadband Master Plan Strategy
Recently the Broadband Commission for Digital Development - established by the UN Agency International Telecommunication Union (ITU) and UNESCO - said it would strive to make broadband policy universal as all countries should have a national broadband master plan strategy by 2015.
The commission also emphasized that by 2015, entry-level broadband services should be made affordable in developing countries through adequate regulation and market forces, for example, costing to less than 5% of the average monthly income.
Finally, one can be sure that broadband connection is no longer a luxury but a necessity and everyone should be able to benefit from fast open connection.