ITU Study Reveals Affordability of ​​​​​​​​​​​​Internet Connectivity

Internet connectivity became less affordable around the world in 2021, according to the latest statistical analysis by the International Telecommunication Union (ITU) and the Alliance for Affordable Internet (A4AI).

The share of people’s incomes spent on fixed broadband and mobile Internet services increased globally last year, in parallel with upticks in demand and usage compared to 2020, reveals an ITU-A4AI policy brief, The affordability of ICT services 2021.

Relative prices of fixed broadband services climbed to 3.5 per cent of gross national income (GNI) per capita globally in 2021, up from 2.9 per cent in 2020. The relative prices of mobile broadband services around the world also edged up to 2 per cent of GNI per capita, from 1.9 per cent a year earlier.

Yet people have sacrificed other goods and services to maintain reliable Internet access during the Covid-19 pandemic. Those who can have largely stayed connected, even at relatively higher prices.

“Broadband services have ceased to be a mere luxury,” said ITU Secretary-General Houlin Zhao. “They are a necessity for communication, teleworking, online education, and other essential services. Still, we must urgently address the issue of affordability if we hope to achieve our goal of universal and meaningful connectivity.”

Affordability gaps have persisted or widened over the past year. Fewer economies now meet the affordable cost target of 2 per cent of monthly GNI per capita for entry-level broadband service, as set out by the United Nations Broadband Commission.

Consumers in low- and middle-income economies typically paid five to six times more, relative to their income, to use information and communication technology (ICT) services than consumers in high-income economies did in 2021.

At the regional level, users in Africa paid more than three times the global median price for mobile broadband services, and over five times the global median for fixed broadband.

Worldwide, only 96 economies met the UN Broadband Commission target for the prices of data-only mobile broadband prices in 2021, seven fewer than in 2020. At the same time, only 64 economies met the Commission’s target for fixed-broadband prices, down by two from 2020.

Among the world’s 46 least developed countries, entry-level fixed or mobile broadband Internet costs less than 2 per cent of GNI per capita in only four cases: Bangladesh, Bhutan, Myanmar, and the Republic of Nepal.

Fixed broadband services saw the highest jump, with prices increasing by 8 per cent last year (as measured in US dollars, adjusting for inflation).

This meant fixed broadband became less affordable for many users, with relative prices climbing from 2.9 per cent of GNI per capita in 2020 to 3.5 per cent in 2021. The price of mobile broadband services also increased slightly, from 1.9 to 2.0 percent of GNI per capita worldwide.

Historically, global demand for broadband services and their overall affordability have appeared to climb hand in hand, with price drops typically prompting more subscriptions.

Even with last year’s price rises, both data usage and the number of fixed and mobile broadband subscriptions continued growing globally, suggesting people were cutting other expenses to be able to keep using the Internet.

To some extent, the relative price increase for broadband services reflects a global economic downturn triggered by the Covid-19 pandemic. Many countries have seen GNI reductions, offsetting gains for consumers even where prices declined.

On the positive side, broadband operators in many countries increased the data allowance included in their benchmark baskets. Users who could afford those baskets, therefore, received greater value for money.

The International Telecommunication Union (ITU) is the United Nations specialized agency for information and communication technologies (ICTs), driving innovation in ICTs together with 193 Member States and a membership of over 900 companies, universities, and international and regional organizations.