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A4AI report shows reduction in mobile data costs in Nigeria

… but as demand for internet services surges, progress remains too slow

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a4ai, African woman making phone call
African woman surfing the internet via a cellphone

The latest edition of the Alliance for Affordable Internet (A4AI) mobile pricing data report shows that costs continue to come down, especially in Least Developed Countries (LDCs) like Nigeria.

TechEconomy.ng had reported the Minister of Communications and Digital Economy (Nigeria), Dr. Isa Pantami, stating that cost of data subscription in the country reduced by over 50% in 11 months.

SIm Swap

Dr Isa Pantami

The average cost of 1GB of data reduced from the January 2020 cost of N1,000 to N487.18 in November, 2020.

About a year ago, a team from the Nigerian Communications Commission (NCC), led by the Executive Vice Chairman, Prof. Umar Danbatta, made  a presentation to the Minister on new data packages been offered by some telecom operators and efforts made to review the price of mobile data downwards in Nigeria.

The Minister commended the telecom operators that introduced new data packages but maintained that the price of mobile data in Nigeria must reflect the realities of the time considering the cost of living in Nigeria and the over 170 Million internet users in the country.

prof Danbatta and telecoms

Prof. Umar Danbatta

While welcoming the news, A4AI swiftly pointed out that “in a world where internet access has become a lifeline, progress is far too slow, with a billion people still living in countries where basic access is not affordable”.

“As demand for ICTs continues to grow, we must also take a hard look at today’s affordability targets and consider how we raise ambitions to meet people’s need for affordable meaningful connectivity”.

Costs fall but still unaffordable for the many

A4AI measures internet affordability as the price of data as a percentage of average monthly income.

Cost of 1GB of Broadband Data in USD (Nigeria):

A4AI

Source: A4AI

Across the 95 countries it studied, the average cost of 1GB mobile data fell from 4.6% to 4.1% of income between 2019 and 2020, a drop of 12.4%.

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Affordability as a % of Average Income:

A4AI

Source: A4AI

While still twice the UN’s ‘1 for 2’ affordability target, 1GB data for no more than 2% average monthly income, A4AI stated that this much-needed progress means millions more people were able to stay connected with loved ones and access life-saving health information.

Seven countries reached the UN target for the first time. These countries — Bolivia, Cameroon, Ghana, Libya, Mongolia, Morocco and South Africa — have a combined population of 222 million people.

“Yet, of the 95 countries included in our analysis, 52 are yet to reach ‘1 for 2’, meaning almost one billion people live in countries where basic internet access remains unaffordable. And even in countries where 1GB is priced at less than 2% of average monthly income, income inequality means that basic internet access will still be out of reach for many lower-earners”, the report shows.

Africa continues to improve while the Americas plateau 

A4AI also shared more good news as prices are dropping quickly in places where high costs pose the biggest barriers.

Affordability of 1GB across least developed countries (LDCs) improved by 15%, down to 7.2% of average monthly income.

In Africa, the region where mobile internet remains least affordable (5.8% of average monthly income), the average cost of 1GB has dropped by a third since the UN target was adopted in 2018.

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However, at the country level Africa’s progress is uneven and huge disparities remain. While the average consumer in Egypt pays just 0.5% of their income for a monthly 1GB, those in the Central African Republic pay an eye-watering 24.4% — an 8% jump from 2019.

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A4AI

 

The report contained that across Asia there was similar improvement, albeit from a much lower base, with costs falling 11.8% in 2020.

“This is a marked improvement from the previous year which saw little change. In contrast with Africa, the disparity between countries in Asia is far narrower, ranging from Sri Lanka where the price of 1GB of data is equivalent to 0.3% of average monthly income to Afghanistan where 1GB is priced 5.5%”.

Rate of Broadband 1GB Nigeria

In the Americas there was virtually no change in aggregate affordability in 2020. Countries that saw significant improvements were offset by others where affordability worsened.

In some countries where data became less affordable, increased costs were explained by high rates of inflation or the introduction of entry-level plans with bigger data packages at higher costs.

After five years of progress, data still too costly

A4AI said that the cost of data has fallen substantially in all regions since it began publishing mobile broadband pricing data five years ago.

Across the 52 low and middle-income countries that have been included in our analysis every year since 2015, the average affordability for 1GB of mobile data decreased from 7.0% in 2015 to 2.7% in 2020.

Rate of Broadband 1GB Nigeria

“Over this time we’ve seen particularly strong improvements in Africa and the LDCs, with costs dropping by an average of 65% in both groupings. In the least developed countries we’ve studied since 2015, people who previously paid an average 14.1% of their income for 1GB, today pay 4.8%. Uganda has seen costs fall from almost 28% of income to 6%, while Bangladesh and Cambodia have all now achieved the UN’s ‘1 for 2’ affordability target”.

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Rate of Broadband 1GB Nigeria

Looking forward to more ambitious targets

“But despite five years of improvements, the majority of countries in our analysis still have unaffordable basic data plans.

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“Africa and the Americas are still some way from reaching the ‘1 for 2’ target as regional averages. This is a tough and persistent problem that needs to be overcome.

Olusola Teniola, A4AI

National Coordinator, Alliance for Affordable Internet (A4AI – Nigeria), Olusola Teniola

“But looking forward, the affordability challenge becomes greater still as we need to raise ambitions beyond basic access”, the report reads.

While 1GB of data might have been sufficient to meet someone’s internet needs five years ago, today this package is severely limiting and in five years’ time it will be totally inadequate.

With that in mind, A4AI is conducting an analysis that will support an update of the data allowance used in the affordability target.

The average affordability of a 2GB package currently stands at 5.8% and a 5GB package is priced at 9.9% of average monthly income.

“This puts them out of reach for the vast majority of people in low and middle-income countries. In order to keep pace with our evolving needs for digital technology, it is critical that we rapidly bring down costs so that these bigger data packages are within reach for everyone.

Alliance for Affordable Internet has also expressed readiness to work in partnership with governments, companies and civil society to drive the change needed to bring down the cost to connect and deliver universal affordable meaningful connectivity.

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