In Malawi, people pay about 87% of gross national income per capita for 1 GB of mobile data. Rwandans pay only 2%. DW investigates the reasons for this large price difference.
The smartphone and the internet play the same important role for Tabu Kitta as for most Africans in their thirties:
“Everything I do revolves around using the internet. I mostly call with the internet. I text mostly with the internet. On a good day, I watch videos online,” Kitta told DW.
There are days when businesswoman and press officer Kitta has to do without the internet. Malawi has the most expensive mobile internet rates in Africa.
“On a good day, I spend about three dollars on a one-day data bundle,” she said. But she can not always afford it.
Kitta estimates that she spends a total of about $ 70 (€ 56) a month going online. “Mobile data pricing is indeed a challenge for many Malawians.”
Only in America is mobile data more expensive
The cost is a challenge for most Africans. On average, Afrikaans providers charge $ 3.30 per gigabyte, as evidenced by a worldwide survey by the British provider Cable UK. Only the American continent has higher prices.
“As income in Africa is low and the price of mobile prices is generally quite high, if people express it in a relationship, the difference becomes even greater,” said Martin Schaaper of the United Nations International Telecom Union ( ITU) told DW, whose team regularly analyzes developments in the telecommunications market. According to the benchmark, prices in Africa are therefore much higher than in other parts of the world, and especially compared to industrialized countries, he explained.
The trend is nonetheless towards a positive adjustment. “It’s becoming more affordable in most parts of Africa, especially when you look at the price of data compared to gross national income per capita,” Schaaper said.
Malawi is a prime example of high prices. According to Cable UK, a gigabyte of mobile data costs an average of $ 27.41 here. The United Nations recommends that this amount of data should not cost more than 2% of gross national income per capita. In Malawi, the equivalent cost is 87%.
Benin and Chad’s prices also differ significantly from the UN recommendation. Also, mobile internet is many times more expensive than would be appropriate given the economic power of the country.
Many reasons for high prices
An important cost factor for providers is the infrastructure: “They had to upgrade from 2G to 3G to 4G and now 5G,” said UN telecommunications expert Schaaper. “It calls for continued investment, which needs to be refinanced. What’s more: in Africa, many regions are difficult to access – it’s particularly expensive to set up infrastructure there.”
Schaaper cites the low number of competitors in the market as another important factor: “If there are only one or two suppliers in a country, they have little incentive to lower prices,” he said.
A third factor is much more difficult to prove with data: mobile phone prices also depend on individual country policies: “Is the government willing to help providers? Is the government willing to make access more affordable for the general public? and to help cover remote areas? and it changes from country to country, “said Martin Schaaper.
Ethiopia is an exception because mobile telephony is in public hands. No competition in the private sector with the state-owned “Ethiotelecom” is allowed.
Who are the suppliers?
Much depends on who the provider is. Because the languages of the former colonial powers are widely spoken in Africa, it was easy for European companies such as Vodafone, Orange and Altice Portugal or the Indian Airtel to conquer the markets. Meanwhile, large African providers – such as MTN from Nigeria or Telkom from South Africa – have also established themselves in many countries on the continent.
‘It’s clear that they [big, multinational providers] has an advantage, “Schaaper said:” They have the knowledge, the staff infrastructure, they know about pricing. ” A negative consequence is that they have no problems relocating smaller local competitors: “This obviously has a negative effect on prices,” said Schaaper. There are also competition restrictions in countries that favor state-owned enterprises.
Hope for improvement in Malawi
In August, the Malawi government announced a first step in reviving the market. President Lazarus Chakwera plans to issue a license to a third-party operator along with Airtel Malawi and TNM. This is in line with the hope that mobile data will eventually become cheaper. People like Tabu Kitta then no longer have to think about whether they can use a smartphone at any time.
Mirriam Kaliza (Lilongwe) contributed to this article.
This article was adapted from German.