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Broadband ISP Affordability Remains a Serious Problem in Poorer Countries

Posted: 12th Sep, 2011 By: MarkJ
point topicTelecoms analyst firm Point Topic has today released the results of a new study that compares the annual cost of subscribing to the cheapest, and usually slowest, fixed broadband ISP services from around the world. It found that the broadband prices can be over 1,000 times higher, in real terms, "in the poorer countries".

The research, which used data collected from 2,000 tariffs in 64 countries, effectively displays how much of an average yearly income in each country (as a % percentage) would be needed to pay for a year's subscription to the cheapest option available.

Tim Johnson, Chief Analyst at Point Topic, said:

"The results gap between rich and poor, the haves and have nots in broadband terms is revealing. It’s in everyone’s interest that broadband penetration keeps increasing globally. Governments gain revenue, businesses gain competitiveness and individuals get access to a wealth of benefits online. At a time when economic growth is a major challenge broadband is a great mechanism to add a percentage point or two to GDP.

How this is achieved is the big question. Mobile Broadband and Satellite are great and offer access quickly and easily where other options cannot. However, data caps and high overage costs mean they have their limits but given the high cost of fixed infrastructure deployment, particularly outside urban areas, they are going to be part of the mix.

There really is no option but central subsidy for many markets when it comes to broadband and even the richest nations are going to have to dig deep to allow access to broadband for 100% of their population."

The UK manages a respectable 0.65%, which is not far off the USA (0.51%), Germany (0.54%) and France (0.60%). By contrast South Korea didn't do so well on 1.4%, while residents in China needed 3.04% of their annual income to get broadband. A chart of the Top 10 Cheapest and Most Expensive Countries shows an even bigger gap.

top 10 cheapest and most expensive broadband countries 2011

Affordability often stems from having a strong and competitive market, not to mention a viable infrastructure from which to base broadband services off in the first place. As a result it's easy to see why broadband is so expensive in developing countries where it's often still regarded as somewhat of a luxury rather than a necessity.
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