Despite falling prices, consumers living in emerging markets are still paying far more for broadband than their mature market counterparts, putting it completely out of reach for the majority of them, according to Ovum
p>Despite falling prices, consumers living in emerging markets are still paying far more for broadband than their mature market counterparts, putting it completely out of reach for the majority of them, according to Ovum
The independent telecoms analyst studied broadband prices in 19 emerging markets, such as South Africa, Nigeria, and Colombia, to see what has changed from its last look in 2010.
Ovum found that while prices in most markets fell compared to 2010, broadband continued to be beyond the reach of the vast majority of emerging market consumers. This lack of affordability is a major inhibitor to unlocking the growth potential in these markets.
Ovum senior analyst Richard Hurst commented: “Demand for broadband services in emerging markets continues to be stifled by high prices. In some countries, broadband pricing was double or triple the price of an equivalent service in a more developed market.
Pricing out
“In addition, lower GDP per capita in most emerging markets means that broadband is only available to the highest socioeconomic groups.”
Ovum found that South Africa had the most expensive broadband tariffs of the 19 countries in its sample. Entry-level services in South Africa cost as much as $1,443 per year, with the prices of high-end services up to $6,000 per year.
Nigeria’s broadband tariffs were also among the most expensive in Ovum’s sample, and the country’s low GDP per capita meant that they were also some of the most unaffordable. Ovum found that lower end entry-level services cost as much as $1,211 per year in Nigeria.
Hurst commented: “While prices remain high, we expect them to fall slightly in the short-term. Network operators and service providers will reduce their prices and introduce packages to improve affordability and stimulate data usage so they can attract more subscribers and drive revenue growth.”
In the countries that Ovum looked at, broadband services using HSPA technology were the cheapest option for entry-level users, with an average price of $223 per year. While this was far cheaper than entry-level broadband services based on DSL and WiMAX technologies, HSPA packages had a much lower data allowance. Overall, Ovum found that entry-level DSL packages offered the best value for emerging market consumers.
