348 million Africans living in the Sub-Saharan region lack access to mobile internet, a new report by GSMA has found.
With the emergence of the COVID-19 pandemic, households and economies on the continent have had to endure reduced household income and stalled Gross Domestic Product (GDP) growth. These setbacks find meaning in this new report on ownership and affordability of internet-enabled phones among Africans.
The 48-page report, Making internet-enabled phones more affordable in low- and middle-income countries, highlights limited access to credit, gaps in access to affordable handsets and affordable finance as challenges. From the rural to urban centres, the problems restrict the efforts to bring access to mobile internet to more people.
The price of a handset in rural areas tends to be higher than in large cities, due to high transportation and logistics costs, as well as the commissions taken by intermediaries.GSMA, April 2022
In South Asia, another region spotlighted in the report, 1.165 billion people do not have internet-enabled handsets. Less enabling regulation is the only stumbling block for the region on the path to digital inclusion.
Contrastingly, Sub-Saharan Africa struggles with expensive data costs limiting mobile internet use, particularly for new users. Smaller and fragmented markets dominate the region. The problems restrict opportunities to scale mobile penetration and financing.
To improve smartphone ownership and mobile internet penetration in the South Asia region, governments are promoting digitisation. The presence of large markets also helps the region’s cause.
But, there is a unifying trend in the analysis. Stakeholders in both regions have to improve access to handset financing for people, including women.
Getting around this means taking market peculiarities into consideration. Beyond the differences, it’s just as important to develop an enabling environment that guarantees handset affordability and adoption in the focus areas.
From supply to demand, the COVID-19 pandemic caused handsets to become less affordable in many low-and-middle-income countries. However, the global health crisis established the importance of being connected, especially to maintain social connections, access to education or earn an income from home.
Making internet-enabled phones affordable
According to the report, progress in handset affordability is more likely to come from stronger industry partnerships and a supportive enabling environment. For this, the report urges industry players to strengthen partnerships and cooperation.
What do the gains look like? Users and manufacturers will reap from improved price positioning, marketing and flexible payment models.
Governments have roles to play too. They have to be committed to driving partnerships with industry players and ensuring an enabling policy and regulatory environment. Underserved citizens are the biggest winners here: handsets will become more affordable.
A consumer may be willing to allocate a relatively higher share of their income to an internet enabled handset (and consider it affordable) if they perceive being connected as relevant, valuable and satisfying their personal needs or aspirations.GSMA, April 2022
In a December 2021 report published on the World Bank blog, researchers found that high prices of mobile services and low purchasing power threatens the uptake of mobile internet services in Sub-Saharan Africa.
The report further highlights gender-based and urban-rural adoption gaps: women have a lower probability (by 6 percentage points) of going online while living in an urban setting increases access by 4.5 percentage points. Younger people (up to 40 years old) and better-educated individuals are more likely to adopt mobile broadband than people employed in the service sector.
Despite the threats limiting smartphone ownership and mobile internet access in Africa, there is an opening for stakeholders to provide cost-effective solutions.
The solutions, including improved access to Internet-enabled phones, could drive the fortunes of the internet economy on the continent. This aligns with the submissions by Seth Onyango in a March 2022 column.
In the piece, Onyango draws attention to useful projections. Africa’s internet economy could rise by 56% to $180 billion in gross merchandise value by 2025 as paperless retail transactions continue. The proliferation of affordable entry-level internet-enabled handsets, that cost $28 or less, is also central to an upward shift in internet access for Africans in rural and urban centres.
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