Emerging market broadband prices stifling growth

Fixed broadband services in emerging markets are more expensive than in mature markets, keeping them beyond the reach of the majority of consumers, according to research house Ovum. The firm studied broadband prices across 19 emerging markets, including South Africa, Nigeria and Colombia, concluding that growth in fixed broadband is being seriously impeded by the high service cost.

In South Africa, which was the most expensive of the markets that Ovum surveyed, prices range from $1,443/year for entry level DSL services to $6,000/year for the high end options. In Nigeria, which has a GNI per capita of $1,180, entry level broadband services cost $1,211/year.

“In some [emerging markets], broadband pricing was double or triple the price of an equivalent service in a more developed market,” said senior analyst Richard Hurst. “In addition, lower GDP per capita in most emerging markets means that broadband is only available to the highest socioeconomic groups.

Emerging markets are often characterised by limited fixed infrastructure, which has created enormous opportunities for wireless and mobile communications solutions. Ovum found that HSPA services were the cheapest option for data-hungry consumers in emerging markets, although the performance limitations and lower allowances made for a compromise on customer experience.

The firm concluded that entry level DSL services represented the best value for money for emerging market consumers, despite their considerable expense.

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