Encouraging statistics. The world is becoming more connected (technologically speaking), and trends show we’re paying less for it. High- speed Internet prices have dropped globally more than 50%, and entry-level information and communication technology (ICT) services have seen an average of 18% cost decline compared to 2009 data. ITU released new figures recently showing that the cost of mobile cell services dropped near 22%. This is 15% more of a decline than fixed telephone costs. Cellular subscriptions are also on the rise worldwide.
Where does this data come from? Well, the IPB price basket. IPB, or ICT Price Basket is a composite measure of affordability based on three sub-baskets: fixed telephone, mobile cellular, and fixed broadband Internet services. The IPB composite measure is a percentage of average Gross National Income (GNI) per capita. The IPB is also a benchmark measure, used to monitor the relative price of ICT services while indicating service affordability across countries and over time. The IPB is the sole measure to monitor these services worldwide, covering 165 economies.
The big picture. So, what does the data tell us this year? This year’s data indicates ICTs are most affordable in the richest countries. Pricing of services has perpetuated a ‘digital divide’ between the haves and the have-nots. High-income countries are paying little for ICT services, and the world’s poorest countries are paying more (see chart.)
ICT Price Basket by level of development, 2008 and 2010
Why are fixed broadband prices declining? The overall fall in prices for fixed broadband services is mainly due to price reductions in developing countries. In these areas, the fixed broadband sub-basket dropped by 52%, compared to 35% in developed countries. Don’t be fooled though. These steep price drops often reflect the extremely high cost of broadband in developing countries. Even at half the price, the service is still out of reach for average citizens. Many of the countries where the cost of broadband Internet access is extremely high are UN-designated Least Developed Countries, but the group also includes Tajikistan, Swaziland, Uzbekistan, and Papua New Guinea. Not surprisingly, both broadband access and Internet user levels in these countries remain extremely low.
Where are the greatest price declines? Besides Bangladesh, the top countries showing the greatest decrease in ICT price basket value are in Africa. Fixed broadband prices fell over 55%, and mobile cellular prices fell by 25%. The following top ten countries experienced price decreases by over 50%: Azerbaijan, Bhutan, Sri Lanka, Bangladesh, Venezuela, Guyana, Uganda and Austria. While declining prices for fixed broadband services is the main reason, some countries can also attribute the decline to a decrease in mobile tariffs.
A challenge for growth. Even with many African countries in the top ten for price declines, this continent continues to stand out for its high prices. The average consumer continues to be alienated from access due to cost; only one out of ten people in Africa is using the Internet. Here’s the challenge: getting broadband or something like it into developing countries. With ICTs being the primary driver for development, both social and economic, countries without access risk falling behind, according to ITU Secretary-General Dr. Hamadoun Touré.