SADC not bridging the digital divide
Despite a regional infrastructure policy aimed at establishing affordable, always-on internet availability in the region, low levels of internet access persist in SADC countries. Our content partner, Research ICT Africa (RIA), examines the barriers to access in the region and what should be done to overcome them.
nformation and communication technologies (ICTs) are recognised by the Southern African Development Community (SADC) member states as enablers of stronger economic development. Yet, these countries are still grappling with slow and unreliable broadband access even after the deployment of undersea fibre cables.
The SADC Declaration on Information and Communication Technologies (2001) evokes member states prioritise rural and remote areas, underprivileged urban areas, institutions of learning and other communities of special benefit, as a way of bridging the digital divide. The majority of rural area residents remain unconnected nonetheless.
According to the International Telecommunication Union's (ITU) statistical dataset (2017), internet penetration in Africa is very low compared to other continents. As of 2017, only 21.8% of African residents have used the internet compared to 43.7% in the Arab States, 43.9% in the Asia/Pacific region, 67.7% in the CIS, 79.6% in Europe and 65.9% in the Americas. While the Declaration sets out clear strategies to bridge the digital divide between member states and the rest of the world, this has yet to be achieved at the regional level. Though the average internet penetration rate in the region of 26% is higher than that of Africa, it is lower than other regions.
At the country level, the highest internet penetration rates are found in Mauritius, the Seychelles and South Africa at 56.51%, 54% and 53.23%. On the other hand, internet penetration has remained very low in Madagascar (4.71%), the Democratic Republic of the Congo (6.21%) and Malawi (9.61%). Out of the 15 SADC member states, six have not reached the critical mass of 20%.
RIA’s Beyond Access Surveys
The only way to get accurate and reliable internet penetration figures in a prepaid mobile environment is through nationally representative demand-side survey. RIA is currently conducting Beyond Access Surveys in eight African countries: Ghana, Kenya, Lesotho, Mozambique, Nigeria, Rwanda, Tanzania and South Africa. Four of these countries are SADC member states: Lesotho, Tanzania, Mozambique and South Africa. The Survey assesses ICT access and use among individuals, households and business to map the issues and trends in each ICT sector.
Among the four SADC countries, three countries have been completed: Lesotho, Tanzania and South Africa. When data is disaggregated by sex, the findings show that slightly more men (36%) than women (31.0%) use the internet in Lesotho and Tanzania (27.8% of women compared to 31% of men.)
The internet access gap is even larger in rural than in urban areas. With operators targeting urban markets and universal service funds apparently ineffectual in several countries, arguably other than Lesotho, about 83% of rural dwellers are not connected to the internet, while about half of the urban areas are connected in Lesotho. In Tanzania, 86% of rural dwellers remain unconnected to the internet compared to 44.6% in urban areas.
The low internet penetration in the SADC region is not only surprising given the investment made in the undersea cables, but is also evidence of failed policy. In 2012, the SADC region set out a regional infrastructure development plan with the vision of establishing affordable, always-on connectivity for the SADC region. To improve access and use in the region, an action plan to ensure the availability of broadband connections with open access fibre exists for all SADC member states and their major cities, along with at least one international exchange point in each member state. The strategy advocated for affordable high-speed internet access potentially through terrestrial wireless or satellite technology in remote areas.
Unfortunately, most of these objectives have not been achieved – a gap which probably exists due to poor coverage, unaffordability of services and devices, and illiteracy and lack of digital literacy in some parts of some of the countries.
The reasons for the continued digital divide between those able to access the internet and those unable to can be explained by the unaffordability of services and internet-enabled devices. RIA’s Beyond Access Surveys assessed demand-side trends in Lesotho’s ICT sector in 2017, and the results show that 46% of phone owners have a smartphone, yet penetration rates are considerably lower than this.
A much smaller number of users in rural areas own a smartphone. In Tanzania, only 30% of individuals own a smartphone, but the majority of mobile phone owners claim that smartphones are expensive – indicating that the costs of device is a barrier to internet access.
"The low internet penetration in the SADC region is not only surprising given the investment made in the undersea cables, but is also evidence of failed policy."
Mobile pricing in SADC
RIA measures the cost of communication by mapping African mobile prepaid pricing trends with a voice/SMS basket, a 1GB prepaid data basket and the Bundled Value for Money Index (VMI). All of these are calculate and represented in RIA’s African Mobile Pricing (RAMP) Index. Both the voice/SMS basket and the 1GB basket methodologies calculate the minimal price for consumers. The mobile and wireless market in SADC tends to have dominant players with more than 50% market share and some as high as 80%.
Using the RIA 1GB data basket, Tanzania is found to be among the best-performing countries. It is ranked fourth in Africa behind Egypt, Tunisia and Guinea. The competitive 1GB data basket in Tanzania is attributed to the pricing competition among operators in the market. This has made Tanzania the best-performing country in the SADC region, with 1GB of prepaid mobile data costing USD 2.27. The second-best performing country in SADC is Mozambique (USD 2.71) as a result of the pricing pressures from the late entrant Movitel placed on duopoly operators Vodacom and MCel and effective regulation of their entry.
The Seychelles, Zimbabwe and Swaziland are among the worst-performing countries regarding 1GB of prepaid data. Swaziland, which has been running a monopoly in both the fixed and mobile markets, is ranked 48th out of 50 African countries in the 1GB data basket.
"1GB of data in Malawi, Namibia and South Africa costs six times more than the same amount of data in Egypt (USD1.24)"
Price trends in the SADC region
Using the same mobile pricing data , RIA mapped the price trends for the SADC region in the period Q1 2016 to Q2 2017. The stand-out price reductions appear in Tanzania and Mozambique, more than in other SADC countries, where the cheapest 1GB of data dropped by 61% from a high of USD5.97 in Q1 2016 to USD2.27 in Q2 2017 thereby pushing Tanzania into the top-five cheapest countries in Africa and position number one in SADC.
Mozambique was ranked first in Q1 2016 with a 1GB cost of USD3.34. Even though data prices fell in Mozambique, they did not fall faster than in Tanzania over the period of analysis. Prices only came down by 19% to reach USD2.70, making it the second-cheapest country for 1GB data in SADC.
While prices for data have been declining in other SADC member states, Swaziland and Angola are on an increasing trend. This is due to an absence of competition in these markets. MTN has an effective monopoly in Swaziland, and in Angola there are only two operators with the dominant operator Unitel owning 87% of market — a scenario likely to lead to an abuse of market power and, ultimately, high prices as evidenced by high data prices in the market.
Among the smaller nations (Botswana, Lesotho and Swaziland), Lesotho performs very well over the entire period. Though data prices in Lesotho have been increasing, the cost of 1GB data in Lesotho is much lower than in Botswana and Swaziland. This is surprising given the mountainous topography of Lesotho as compared to Botswana, which has a 50% stake in the EASSy cables in Namibia. Interestingly, 1GB of data is cheaper in Malawi and Namibia than it is in South Africa and from the above data one can conclude that the strength of the regulator plays a significant role in data pricing. Lower prices are to be found in more competitive or effective regulated markets.
Mobile broadband has the potential to extend economic opportunities and key services to both urban and rural populations. The Southern Africa region, like the world over, acknowledges the potential for ICTs to contribute to economic integration and development in the region. Recognising this impact, SADC member states passed a Declaration on ICTs in 2001 to develop the sector. The Declaration sought to establish a coherent policy environment to bridge the digital divide between Southern Africa and the rest of the world as well as between the haves and have-nots within the region.
Despite this regional infrastructure policy aimed at establishing affordable, always-on internet availability in the region, a large portion of SADC residents still do not have access to the internet. Even with the presence of mobile broadband having the potential to connect the majority to the internet, about 74% of the SADC population does not have such access. The majority of these people who are not connected to the internet reside in the rural areas.
Of greater concern than this low internet access percentage is that fewer women than men access and use the internet, according to RIA’s Beyond Access Surveys. Initial results also find that in Tanzania, 86% of rural dwellers remain unconnected to the internet compared to 44.6% in urban areas. The study finds a greater internet divide in Lesotho: about 83% of the rural population cannot connect to the internet, while only 50% of the urban population uses the internet.
The digital gap can be explained by unaffordable services and internet-enabled devices. The pricing information from RIA shows that the cost of 1GB of prepaid mobile data in the SADC region is higher than in the best-performing countries with only two countries, Mozambique and Tanzania, being among the best-performing countries.
1GB of data in Malawi, Namibia and South Africa costs six times more than the same amount of data in the best-performing country: Egypt (USD1.24). Swaziland is the worst-performing country in the region, with 1GB of data being 25 times the price of 1GB in Egypt, and 15 times that in Tanzania. The high cost of data in the SADC region is one of the main contributors to digital inequality in the SADC region.
The survey results further show that a large portion of the SADC population does not have access to internet-enabled devices such as smartphones. While smartphones have the potential to connect the poor, these devises remain unaffordable to the ordinary citizen. The majority of those who do not use the internet in individual user survey conducted stated that smartphones are too expensive for them.
Affordability is clearly an inhibiting factor to internet penetration in the SADC region. The high prices are the result of minimal competition in the market as well as high taxes on internet-enabled devices.
Policy interventions to reduce the cost of internet connectivity include:
• Devising regulatory mechanisms that ensure service-based competition through access to wholesale networks, such as better enforced infrastructure sharing and facility-leasing arrangements;
• Undertaking necessary market reviews or any other legal preconditions to conduct conducting studies into market dominance and anti-competitive practices, including their impact on prices;
• Relieving rollout bottlenecks that affect pricing ,such as spectrum assignment; and
• Prioritising the rolling out of public Wi-Fi in all public buildings especially in the rural
areas to connecting the unconnected and to provide complementary access to
high cost paid services.
This is an edited extract from RIA's policy brief. Read the full publication here.
(Main image: Customers surf the web at an internet cafe in Kinshasa, DRC, in February 2015. By Federico Scoppa/AFP/Getty Images)
The opinions expressed in this article are those of the author(s) and do not necessarily reflect the views of SAIIA or CIGI.