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The challenge of affordability of devices in Africa

19 August 2022

Almost 15{2b3fe3109f87c6f1c896babd3a2485fbf135a42141067a7771ef7eb1664b998e} of global GDP is the result of the digital economy, but in the African market this figure is only 1{2b3fe3109f87c6f1c896babd3a2485fbf135a42141067a7771ef7eb1664b998e}. A performance that shows the digital divide of Africa over the rest of the world. A performance that shows that Africa is far behind in this field, which is playing an increasingly important role in the global economy.

In Africa mobile broadband is the main way that people access the internet. However, despite major advances in mobile connectivity, Africa’s mobile broadband penetration rate is still the lowest worldwide. Performance is mainly due to the high cost of services and mobile phones.

According to a recent survey, in Africa on average, 1 GB of mobile data costs 8{2b3fe3109f87c6f1c896babd3a2485fbf135a42141067a7771ef7eb1664b998e} of monthly income, well above the “1 for 2” affordability threshold, where 1 GB of mobile data should cost no more than two percent of the average income. The relatively high costs of getting online also include the cost of purchasing a mobile device. In 2018, the median cost of an entry-level internet-enabled device in Africa was 40{2b3fe3109f87c6f1c896babd3a2485fbf135a42141067a7771ef7eb1664b998e} of monthly income, and the mean average was 62{2b3fe3109f87c6f1c896babd3a2485fbf135a42141067a7771ef7eb1664b998e} of monthly income. For the poorest 20{2b3fe3109f87c6f1c896babd3a2485fbf135a42141067a7771ef7eb1664b998e} of the population, the average cost of a device in Sub-Saharan Africa was 375{2b3fe3109f87c6f1c896babd3a2485fbf135a42141067a7771ef7eb1664b998e} of monthly income in 2018.

Sub-Saharan Africa is also the region that faces the greatest challenge in terms of the affordability of an entry-level mobile device (the cheapest device available that supports at least basic internet access).

 

 

The combination of expensive entry-level mobile data plans and entry-level devices keeps most people in the region offline. For example, in an A4AI analysis using mobile broadband prices from 60 low- and middle-income countries, when the price of a hypothetical, low-cost smartphone ($ 48) was added to that of a 500 MB broadband plan, in almost all countries the number of people who could afford both a broadband plan and a low-cost smartphone fell on average by 20{2b3fe3109f87c6f1c896babd3a2485fbf135a42141067a7771ef7eb1664b998e}.

An additional concern is the mobile gender gap in mobile internet use. In Sub-Saharan Africa, this gap is estimated to be 41{2b3fe3109f87c6f1c896babd3a2485fbf135a42141067a7771ef7eb1664b998e}, which we may observe to persist in the future, due to the underlying gender wage gap in almost all countries.

In order to improve device affordability, in a short timeframe, analysts propose several initiatives:

• New Business Models to Lower Device Costs – To address both the affordability challenge and the need for a better user experience, some device manufacturers and their partners have developed smartfeature phones. These devices have a similar form and look to a feature phone but include hardware and operating systems that can support broadband internet access and use similar to smartphones. As they are much cheaper than smartphones they can provide a bridge to the future adoption of smartphones and internet services.
• Public Policy Impacts on Mobile Device Costs – Governments could launch programs that focus on subsidizing mobile devices on the continent, especially for women, using resources from universal service and access funds (USAFs). In addition, governments should also assess existing policies, particularly with regard to taxation.

Service providers could also play a supportive role. Through fully managed handset financing programs, such as Channel VAS’s handset loans, acquisition of an internet enabled device is affordable for more people. Thus, even low income population could be part of the digital highways.