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UN Tech Group Finds Most Expensive Broadband 89

Posted by samzenpus
from the golden-dial-up dept.
destinyland writes "In the Central African Republic, broadband internet service costs 3891% of the average monthly income. 'Put another way, a month's broadband service costs more than three years' average wages in the country,' notes one technology blog, 'compared with less than two hours' earnings in Macau.' A United Nations' technology group released the figures in a new report in advance of a September 19 summit on the digital divide in developing countries. ('We are trying to avoid a broadband divide,' said Dr. Hamadoun Toure, the secretary general of the UN's International Telecommunications Union.) Their agency noted that the rate for broadband penetration is below 1% in many poor countries, with monthly costs higher than the average monthly income. 'By contrast,' notes the BBC, 'in the world's most developed economies, around 30% of people have access to broadband at a cost of less than 1% of their income.' And the report also estimates that there are 5 billion cellphones in the world — though some people may own more than one."
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UN Tech Group Finds Most Expensive Broadband

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  • by hedwards (940851) on Sunday September 05, 2010 @01:22PM (#33482300)
    Monthly income isn't the issue that people think it is. It's just a number, the question though is what does it get you and what do you do with it? While generally in parts of the world where incomes are low like that there are the other problems as well, it's hardly a hard link. For example with a tax rate of about half when municipal taxes and national taxes are taken into account, Sweden looks a lot worse with respect to income figures than it really is. Mostly because a lot of the things that we in the US have to pay for as individuals gets covered through taxation.

    The problem is that if it's not already the case, it will be the case in the near future that to be competitive you have to have some sort of internet access, and eventually some sort of broad band. It's like education in a way, if you don't have it you're just going to fall further behind until something remedies the situation.
  • by Kjella (173770) on Sunday September 05, 2010 @02:10PM (#33482542) Homepage

    Well, without getting into too much detail it depends on whether broadband is a tradable or non-tradable good. A tradable good is something like say gold - worth pretty much the same all over the world, because otherwise there'd be arbitrage. A non-tradable good would be something like getting a haircut, which is why most can afford to get haircuts despite living on mere dollars a day. The wages are much lower so the prices are much lower.

    A lot of it is equipment, but a lot of it is also people to lay down cables, wire houses, set up wireless antennas, do support, maintenance, configuration, billing and so on. If you didn't take into consideration local costs, you'd reach a lot of crazy conclusions. And regarding the things they do have to buy, it's profit-maximizing to sell cheaper in poor countries than in rich countries as long as it doesn't hurt the other sales. That is why for example you can find a cheap Chinese or Thai-only phone, because it's only usable in that country and won't hurt your US and other English-speaking sales. I'm sure you could make some sort of deal or to purchase obsolete equipment from a western ISP for cheap.

    All in all, I think it's better to compare to monthly income because they could probably sell it for considerably less and still break even. A far bigger issue I think is penetration, the cost of building out a network is not linear to the number of people on it. Even if only 20% of a town wants broadband you have to wire almost as much as if 80% would want it. That is why you often se rates in third world countries that are much, much higher than what I get even on an absolute scale, despite that everything should be cheaper to do down there.

    At least here in Norway it's about $40 for basic broadband (1-2 Mbit), $60 (1% of average full time income) for medium broadband (5-10 Mbit) while about $80 will get you a top line (20-30 Mbit). Almost everyone who wants it has broadband, which really keeps the costs per customer down. Sure it could probably get even cheaper but compared to many poorer countries we pay little and get a lot. Things like broadband thrive on volume of many people signing up.

  • by _GNU_ (81313) on Sunday September 05, 2010 @02:39PM (#33482790)

    Including a small extra fee for access the municipal fiber network, for 1 month of 100/100Mbit with no caps or meters what so ever, I pay roughly 1.5 hours of my wage after taxes.. and I'm just above average for "low income".. I pay almost twice that for unmetered mobile 3G traffic on my phone though.. tethered to the laptop the gigs tend to run away so unmetered is the only way. ;)

    As far as I've seen from the latest Akamai state of the internet reports, Scandinavia is losing ground to South Korea and some other quickly rising countries... We'll see.. ;)

  • Re:Exactly (Score:4, Informative)

    by Kjella (173770) on Sunday September 05, 2010 @03:38PM (#33483160) Homepage

    If you go to the very bottom of the list, yes. If you look at the full executive summary (PDF) [itu.int], the top 115 countries are doing quite ok with fixed broadband being up to 21% of average monthly income. The last of those are countries like Philippines, Vietnam and Morocco. Of the remaining 45, most are dirt poor mostly having a GDP below $1000/person and the bottom 15 countries have an average of $440/person. Also some of those at the bottom are in addition to being poor also island states, the domestic prices are much lower than an Internet connection requiring sea cable or satellite.. And the situation is improving, the title of chart 4 is "Fixed broadband Internet prices are dropping sharply but remain unaffordable in many developing countries".

    What I got out of the summary is that you can get broadband at somewhat affordable prices in relatively many countries compared to what I thought. Also that being a poor country in a relatively less poor area helps for broadband prices. Most of the countries that really suck for broadband are those south of Sahara, apparently there's no short way to hook up to a rich country's backbone nearby, while those in Central America and SE Asia mostly manage to hook up to a decent country. You can call it a digital divide here, but it seems to have a physical form very much like a desert...

  • Re:Well... (Score:4, Informative)

    by grcumb (781340) on Sunday September 05, 2010 @03:40PM (#33483178) Homepage Journal

    Yeah -- I'm pretty sure that worldwide ownership rate of cell phones is somewhat less than 73%.

    Not by much.

    I work in ICT development and advocacy in the Pacific, and write about it occasionally. I can think of several countries off the top of my head where teledensity [google.com] has risen by orders of magnitude within 12-18 months of new mobile services being rolled out.

    In Vanuatu, where I live, we went from about 20,000 active accounts to 100,000 within 9 months. Unimpressed? The entire population of the country is 235,000.

    I predict that there will come a time when the idea of 73% coverage of all of humanity doesn't raise eyebrows the way it does now. I predict that this will happen within 5-10 years.

  • by Anonymous Coward on Sunday September 05, 2010 @06:05PM (#33484212)

    Broadband would have to be $202.50 per month to be 1% of our monthly household income.

    You make $20250.00 per month? Nice!

  • Re:Um...yeah. (Score:3, Informative)

    by Sarten-X (1102295) on Sunday September 05, 2010 @08:20PM (#33484990) Homepage
    My general experience applies generally. My specific example from Ghana is specific.

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