Costa Rica News – Costa Rica has topped the overall rankings for internet affordability in the latest annual survey of developing and emerging markets undertaken by the Alliance for Affordable Internet (A4AI).
Set up in 2013, A4AI promotes and encourages affordable internet. With over 70 members, A4AI believes that affordability remains the biggest barrier to universal access and that reforming policy and regulation is critical to driving down the cost to connect and bring billions more online.
The annual report is part of A4AI’s ongoing efforts to understand why some countries have succeeded in making internet access more affordable, accessible and universal, and what others can do to catch up.
This year’s study covers 51 developing and emerging countries. It also contains a roadmap for achieving affordable internet, with more than 30 detailed policy recommendations for governments, businesses and not-for-profits.
Almost 60% of the world’s population, most of whom live in developing countries, are offline. Close to 70% of households in the developing world do not have internet access, and while internet penetration rates have increased dramatically in recent years, the pace of change seems to be slowing.
According to a recent study by McKinsey the worldwide growth in internet users has slowed from a three-year compound annual growth rate (CAGR) of 15.1% during 2005–2008, to 10.4% for the period 2009–2013.
Clearly, significant barriers to online access persist. The most pernicious according to A4AI is the high cost of connection. In 2011, the UN Broadband Commission set a target for entry-level mobile or fixed broadband to cost no more than 5% of average monthly incomes (Gross National Income (GNI) per capita), by 2015. We will fall woefully short of that target.
A4AI believes that most of those who are not connected simply cannot afford to be. While many studies note that access prices are falling around the world, the position of developing and emerging markets appears to be getting worse in relative terms.
According to the International Telecoms Union (ITU), at the end of 2013, the average price for an entry-level fixed broadband connection in the developing world still represented more than a quarter of an average citizen’s monthly income. The A4AI study found the cost of fixed broadband is about 40% of an average citizen’s monthly income across the 51 countries surveyed.
The price for an entry-level mobile broadband package in developing countries hovers between 8% and 11.5% of monthly incomes, depending on the plan chosen. By contrast, the cost to connect in many developed countries is near negligible. Citizens of rich nations pay on average just 1-2% of their monthly income to connect.
Other issues, such as lack of relevant content, and limited digital and language literacy, combine to entrench this divide even further.
The Alliance For Affordable Internet’s 2014 Affordability Report is an effort to identify and quantify some of these challenges, and to identify what policy and regulatory drivers can lead to enhanced affordability.
At the heart of the report is the “Affordability Index”. This unique composite Index scores each of the 51 countries included in the report on a scale of 0 – 100, based on both current penetration and usage rates, and the policy and regulatory environment in place that could lead to further progress.
A statistical analysis proves that high scores on the Affordability Index are strongly correlated with lower broadband prices. To help assess drivers in more detail, the overall Affordability Index is broken down into two sub-indices, the infrastructure sub-index, and the access sub-index.
This year, Costa Rica tops the overall rankings, followed by Colombia, Turkey, Malaysia and Peru – all middle-income countries. Rwanda secures the top spot among developing countries, followed by Nigeria, Morocco, Uganda and Kenya.
The report also notes that certain groups are far less likely to be able to connect to the internet affordably:
- In the 51 countries surveyed, there are approximately two billion people earning less than $2 a day ($60 per month), according to World Bank data. Depending on the country in which they live, these individuals have to spend anywhere between 5.5% and 114.5% of their average monthly income in order to access an entry-level broadband package. At present, not a single emerging or developing country can claim to meet the affordability benchmark set by the United Nations (UN) Broadband Commission of broadband priced at less than 5% of monthly income for those potential users surviving on less than $2 a day.
- Across the board, women are far less likely to be able to access the internet affordably than men. Research has shown that women, on average, earn 30% – 50% less than men. This income disparity diminishes the ability of women to afford to access, adopt, and benefit from a broadband connection. The internet access gender gap is apparent throughout the world, although the extent of the gap varies from region to region.
- Those living in rural areas are often unable to secure affordable access to the internet. This is because incomes tend to be lower in rural areas, resulting in a higher real cost to connect; and challenges associated with infrastructure deployment in rural areas result in limited opportunities for access, particularly under current regulatory environments, and in access prices that are significantly more expensive than those in urban areas.
Copies of the A4AI 2014 Affordability Report can be downloaded from www.a4ai.org
By ALEC BARTON, http://www.developingtelecoms.com/
