Why affordable internet remains elusive

The arrival of SEACOM marine fibre optic cable on the Kenyan coast in 2009 excited Internet users  - who were promised reliable and faster  service.

The optimism was that country’s Internet connection to the outside world via fibre - a more versatile connection with better quality was to be cost effective. Consumers were assured of the immense benefits that would accrue from the service.

Eight years later, consumers still find themselves disgruntled. They still pay high charges to be connected to the Internet. This is despite the broadening of the data market that has seen growth of the sector and entry of international Internet service providers

These sentiments were underscored by this year’s report on global affordability and access to the Internet that placed Kenya in 10th position on the continent in terms of Internet affordability and 30th globally.

The report published by the Alliance for Affordable Internet (A4AI) stated that despite the overall drop in the cost of broadband, the cost benefits are not being transferred to consumers fast enough due to inefficient regulation. “High connectivity costs remain one of the biggest obstacles to achieving the universal access pledge,” states the report in part.

“Though broadband prices are coming down, they simply aren’t falling fast enough, leaving low income earners and other marginalised populations unable to afford even a basic connection.”

Kenyan service providers and the government have constantly hyped Kenya’s Internet connection numbers and affordability in respect to other countries in the region. “I think when it comes to Internet costs, we are the leading country on the continent in terms of affordability if not the leading,” said John Barorot, the Managing Director for Technology at Telkom Kenya.

“The charges consumers in this market get for a megabytes (MB) of data is less than a shilling and much less compared to the cost in other markets and this number continues to go down with the ongoing rollout of fibre.”

However, the A4AI states that the current measures of Internet cost and access are inadequate to give a true picture of the affordability of data respective to individual’s income.

“For years, Internet access has been considered to be ‘affordable’ if 500 megabytes of data can be bought for less than five per cent of average monthly incomes,” A4AI explained in part in it’s recent report.

This target has been considered inadequate to give a meaningful picture of Internet use. “First, 500MB is simply too little data to allow for meaningful Internet use; today, 1GB is a more realistic minimum monthly allocation. Second, at the five per cent benchmark, income inequality bars the majority of people from access in many countries.”

The advocacy group proposes declaring Internet as affordable if it costs less than two per cent of the one’s monthly income to purchase 1GB of data. This means that if you earn Sh100,000 for example, your Internet will be considered affordable if you pay Sh2,000 per month for 1GB of data.

Likewise if you earn Sh10,000 per month, affordable Internet in your case would be Sh200 per month for 1GB of data.

Based on this indicator, only five countries in Africa qualify to be termed as having affordable Internet. They are Sudan, Mauritius, Egypt, Tunisia and Morocco. In Kenya, 1GB of mobile broadband is said to cost an average of 9.72 per cent of the average monthly incomes - making Kenya’s Internet more expensive than other comparative countries such as Zimbabwe, Tanzania and Ghana. Countries that were leading in this year’s index including Cambodia, Mexico, Peru and Benin have implemented several reforms that the A4AI recommends to be emulated by other regions.

“Strong policies to promote healthy competition and protect consumers must be a priority for policymakers,” states the report. “Open and competitive markets provide the foundation for growth, innovation, and affordable access. Yet, antiquated policy frameworks remain in place across many countries, preventing competition from being a force of market change and allowing inefficient providers to dominate and keep prices high.”

Mexico which is cited for making strides on reducing the cost of Internet for citizens made several changes to it’s policy to improve market differentiation and boost innovation.

“Mexico’s new legal framework established a new autonomous regulator which has taken steps to reduce the monopoly of dominant companies, increase competition in the market, punish non-competitive practice....,” observed the report.