August 6, 2020: Billions of people are unable to access the benefits of the internet because of the high cost of mobile devices, according to a new survey of smartphone prices in 70 low and middle-income countries including India.
A staggering 2.5 billion people live in countries where a smartphone costs a quarter or more of average monthly income. This is equal to the share of income the average European household spends on housing and utilities. The cost of a device in some countries is higher still:
In Sierra Leone the average person must pay more than six months’ income — USD $265 — for a smartphone.
In India, where almost a fifth of the global population lives, the cheapest smartphone from leading operator Jio costs $346, more than double average monthly income.( see our note at the end of this piece)
In Burundi where a smartphone costs $52, low earnings mean the average person would pay 221% of monthly income.
Access to an affordable internet-connected device is the first step to internet access and provides a lifeline for individuals as well as small businesses that drive economies and create job opportunities across the world. But almost half the world’s population remains without internet access while Covid-19 has underlined like never before the importance of digital connectivity.
In some countries devices pose less of a financial barrier to internet access, such as in Botswana where smartphones are available priced at just $26 (4% of average monthly income), Jamaica ($20 or 5% income) and Mexico ($43 or 5.7% income), highlighting the stark divide between countries.
The report, published by the Alliance for Affordable Internet, an initiative of Sir Tim Berners-Lee’s Web Foundation, looked at both the price of devices and their affordability (price relative to income) to show how accessible handsets are for people living in 70 low and middle-income countries with a combined population of over 5 billion people.
“Once seen as luxury goods, today mobile handsets are essential doorways to the internet,” said Teddy Woodhouse, Web Foundation Research Manager:“The vast majority of the next billion people who come online will do so using a mobile device and so if we’re to make sure more people can access the internet’s benefits, handsets must be more affordable.
The Covid-19 crisis has shown that to be without internet access can mean missing out on critical health advice, losing your livelihood and being cut off from your loved ones when physical distancing becomes the norm. The internet is a lifeline, and we need to do everything possible to remove the barriers that stand in the way of people getting online.”
Almost half of the world’s population remains offline, even as the UN has set ambitious targets to get more people connected. Web Foundation analysis predicts the UN Sustainable Development Goal (SDG) 2020 target for universal internet access will be missed by decades unless there is urgent action from governments.
The biggest barrier stopping people from using the internet today is price, with the cost of data too expensive for most people in low-income countries and with handsets priced too high for many to be able to afford the large upfront cost.
While smartphone affordability has improved steadily over many years, the report warns that this trend could be reversed as a result of the Covid-19 pandemic which has disrupted supply chains and threatens to fuel poverty across the world as the full effect of pandemic’s economic disruption takes hold.
The report calls for governments and multilateral organisations to use policy tools to reduce the costs of handsets for consumers, including:
Reduce taxes on low-cost devices to bring down the purchase price of the cheapest devices and to encourage manufacturers and retailers to offer lower-priced products.
Use universal service and access funds (USAFs) to subsidise devices for those least able to buy handsets.
Support projects that help people spread the cost of devices, giving people access to credit and other financial tools so they do not need to pay the full cost of a device upfront.
Policy action to lower the cost of devices in the countries covered in the report — many of which have low levels of internet use — can help make the internet more accessible for billions more people.
Editor’s note: A reading of the survey data set used in this report shows that the calculation of the price of the cheapest smart phone in India --$ 346 -- is based on the cost of the Reliance Jio LYF CK-LS5501 phone costing Rs 25,800. However it needs to be stated that multiple Android 10 smart phones either made in India by companies like Micromax, Karbonn and Lava or assembled in India by Asia-Pac companies like Transsion ( Infinix) & offering twin SIMS and 4G VoLTE, are available in India for Rs 8000 to Rs 10,000 which is closer to $ 125 - $ 130.