ITU publishes the ‘Measuring Digital Development: ICT Price Trends 2020’ report |27 August 2021
The International Telecommunications Union (ITU) has published another edition of the ‘Measuring Digital Development: ICT Price Trends 2020’ report.
The primary purpose of the report is to serve as a source for monitoring affordability gaps around the world but also within countries although not in depth.
The report made the point that Covid-19 pandemic has emphasised the importance of affordable broadband access to the Internet and other information and communication technology (ICT) services.
The report analyses and compares the retail price of ICT services for more than 200 economies, providing a unique insight into the state of ICT affordability around the world.
It also provides information on the progress of countries towards achieving the Broadband Commission for Sustainable Development's target for 2025, according to which entry-level broadband services should be made affordable in developing countries at a level corresponding to less than 2 per cent of monthly GNI per capita.
The report shows the result of study on affordability conducted in 2020 which looked at prices and trends through five representative baskets of services which are:
- Data-only mobile broadband;
- Fixed broadband;
- Mobile cellular (low usage);
- Data and voice low consumption;
- Data and voice high consumption.
The report concludes that prices for all of the five baskets monitored, continued their slow but steady decline by all three of the measures used: prices converted to US dollars, adjusted to purchasing power parities, and expressed as a percentage of per capita income (GNI p.c.).
Seychelles and Mauritius was ranked 33rd and 46th respectively in the world and were the only countries in Africa in which the fixed broadband prices met the affordability threshold of 2 per cent monthly GNI per capita. Seychelles was ranked 1st in Africa for fixed broadband prices. Three other countries namely; Cabo Verde, Botswana and South Africa were close to meeting the target, with prices below 5 per cent of GNI per capita.
Seychelles has almost reached the Broadband Commission affordability threshold with 2.03 per cent monthly GNI per capita reported in 2020 for mobile-data only plans. In spite of that, Seychelles was ranked 106th in the world, in terms of GNI per capita in the category of mobile-data only which was well off Mauritius who was in the 40th position. As per the report, in 2020, Seychelles was ranked 88th and 112th in the category for low-consumption of mobile-voice-data and high consumptions of mobile-voice-data respectively. This implies that the prices for standard mobile plans providing both voice and data are high and more needs to be done to make those services affordable.
Despite the positive outlook of Seychelles, it is necessary that a study is conducted locally to assess the affordability of data services with respect to average monthly income of the different segment of the population. The main reason for this is because the ITU’s report examined affordability as a percentage of the GNI p.c. which is an averaged measure and within country affordability analysis is also limited. Also, the prices of data consumption used is relatively low in comparison with actual and average data consumption in Seychelles. It is worth noting that the report acknowledges that although the target for a country as a whole has been achieved, often the entry-level of broadband services continue to be unaffordable for the poorest.
There are many factors that influences prices of ICT services in a country. The report highlights that an overarching influencer on overall affordability, ICT adoption and price reduction is the maturity of the regulatory environment. In 2020, for all five baskets of services, the median ICT prices were highest in those countries, which had the least mature regulatory environment associated with a Generation1 (G1) or G2 regulatory environment (based on 2019 regulatory classes).
Prices in a G3 environment were consistently lower, while countries associated with a G4 (advanced) environment had the lowest prices of all. Seychelles is classed in the G2 regulatory category in other words opening markets, partial liberalisation and privatisation across the layers compared to Mauritius, which is a G3 category. The classification of Seychelles may improve once the new legislative framework governing the sector comes into force.
The G3 relates to regulatory environment which enables investment, innovation and access-dual focus on stimulating competition in service and content delivery and consumer protection. On the other hand, in countries where there are integrated regulations led by economic and social policy goals, then the regulatory environment is classified as G4.
The full report can be accessed at the following link: https://www.itu.int/en/ITU-D/Statistics/Documents/publications/prices2020/ITU_ICTPriceTrends_2020.pdf
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