Consumers living in emerging markets are paying up to three times more for broadband than their mature market counterparts, according to Ovum.
Research by the independent telecoms analyst into broadband in 15 emerging markets revealed that emerging consumers are paying far more on average than the rest of the world, despite earning the lowest wages.
Angel Dobardziev, an Ovum practice leader and author of the report on broadband pricing in emerging markets*, said: “The cost of broadband in some emerging countries is three times as high as in mature markets, which when coupled with low wages, makes it an unaffordable luxury for all except a small group at the top of the socio-economic pyramid.
“The striking difference in broadband prices in mature and emerging markets means there is a huge divide in terms of uptake of services.”
Nigeria’s broadband tariffs were among the most expensive of those sampled by Ovum, with the annual cost of some services reaching more than $2,000 per year, despite the country having a low GDP per capita at $1,170.
South Africa had the highest broadband prices of all the countries sampled. The annual cost of some services was found to be more than $5,000, against a GDP of $5,820 per year.
Angel adds: “The key to making broadband more affordable for emerging markets will be an increase in supply and competition, which is currently modest in most markets and non existent outside the key urban areas.
“However, many markets will require concerted regulatory and policy efforts to increase competition and supply and bring affordability within reach of the mass consumer market. As yet it is unclear how quickly this will happen.”
Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Datamonitor group.