12 April 2023
The median price of 1Gb of mobile data in sub-Saharan Africa stands at 3.3% of monthly income per capita, the highest rate globally, according to a report by the American think tank Atlantic Council in collaboration with the Moroccan think tank Policy Center for the New South.
The report also specifies that this rate is well above the maximum threshold of 2% of monthly income per capita set by the United Nations in this area.
Only nine countries in sub-Saharan Africa are among the countries in the world whose inhabitants spend on average less than 2% of their monthly income to benefit from 1Gb of mobile data, while the inhabitants of eight other countries in the region (Republic Central African Republic, Chad, Zimbabwe, Equatorial Guinea, Burundi, Togo, Liberia and the Democratic Republic of Congo) are obliged to devote more than 10% of their monthly income to it. Of the ten countries where the median price of 1Gb of mobile data is the most expensive in the world, five are south of the Sahara.
The report further reveals that the median price of 1Gb of mobile data in sub-Saharan African countries reached $4.47 in 2022, compared to $4.09 in South America, $2.72 in Western Europe and $1.47 in Asia, according to a comparative study by the Alliance for Affordable Internet (A4AI).
Four factors explain the high fixed and mobile Internet prices in sub-Saharan Africa.
The first is the telecommunications infrastructure deficit. According to World Bank data, around 45% of the region's inhabitants are more than 10km from a fibre optic connection, which is higher than in all other regions of the world combined. The United Nations Broadband Commission has, for its part, estimated the investments needed to generalize broadband Internet access in sub-Saharan Africa at 109 billion dollars. 80% of these investments relate to the deployment of infrastructure, including the deployment of 250,000 relay antennas and 250,000km of additional fibre optics.
The level of competition in the telecommunications market is also a determining factor in the cost of mobile data. Studies show that there is an inverse relationship between the number of active mobile operators in a country and the average price of 1Gb of mobile data. The Alliance for Affordable Internet benchmarking study shows that the price difference between markets where one operator has a monopoly and markets with two operators can be as high as $7.33 per 1Gb of mobile data. Another study by the pan-African banking group Ecobank confirms this correlation between increased competition and falling mobile data prices south of the Sahara: the median price of 1Gb is higher in countries where only two operators are in operation ($13.03 on average) than in countries where three operators share the market ($9.17), and countries where four or more operators compete fiercely ($5.25).
In addition, regulatory frameworks governing the telecommunications sector can have an effect on mobile data prices. The most significant impact is that of fiscal policy adopted by governments, such as value added taxes on ICT products and services such as mobile phones and the marketing of mobile data.
On the other hand, consumer habits can have a huge impact on unit costs. While consumers in developed countries are buying bulky or unlimited mobile data plans that encourage carriers to cut prices, most consumers are opting for small a la carte plans.
While the average monthly mobile data traffic in sub-Saharan Africa is expected to almost triple by 2027 to exceed 10Gb per user compared to 3.66Gb in 2022 and 0.72Gb in 2016, Atlantic Council recommends that sub-Saharan African countries draw inspiration from several successful experiences in Asia and Latin America. For example, Cambodia reduced the median price of 1Gb of mobile data from $4.56 in 2013 to $0.13 in 2019, by opening its market to competition and investing heavily in infrastructure. In 2018, this country had seven operators offering subscriptions to high-speed mobile networks and 30 fixed broadband and very high-speed internet providers, compared to a single public operator in 2013.
A drop in mobile data prices is more necessary in sub-Saharan Africa as projections by the International Telecommunications Union (ITU) show that 44 million new jobs could be created in the region if internet penetration increases to 75% compared to around 33% in 2021.