Covid-19 Pandemic Can Reverse Smartphone Affordability Trend: Web Foundation

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  • The report also calls for governments and multilateral organisations to use policy tools to reduce the costs of handsets for consumers
  • In India, where almost a fifth of the global population lives, the cheapest smartphone from leading operator Jio costs $346

Billions of people are unable to access the benefits of the internet because of the high cost of mobile devices, according to a new survey of smartphone prices in 70 low and middle-income countries. The same might present an oppotunity for smartphone makers in the short-, as well as long-run.

“Once seen as luxury goods, today mobile handsets are essential doorways to the internet,” said Teddy Woodhouse, Web Foundation research manager.

He continued, “The vast majority of the next billion people who come online will do so using a mobile device and so if we’re to make sure more people can access the internet’s benefits, handsets must be more affordable.

Handsets priced too high for many

The reports points out that a staggering 2.5 billion people live in countries where a smartphone costs a quarter or more of average monthly income. This is equal to the share of income the average European household spends on housing and utilities. However, In Sierra Leone the average person must pay more than six months’ income — USD $265, for a smartphone.

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In India, where almost a fifth of the global population lives, the cheapest smartphone from leading operator Jio costs $346, more than double average monthly income. In Burundi where a smartphone costs $52, low earnings mean the average person would pay 221 per cent of monthly income.

“Almost half of the world’s population remains offline, even as the UN has set ambitious targets to get more people connected. Web Foundation analysis predicts the UN Sustainable Development Goal (SDG) 2020 target for universal internet access will be missed by decades unless there is urgent action from governments,” read the report.

It continued, “The biggest barrier stopping people from using the internet today is price, with the cost of data too expensive for most people in low-income countries and with handsets priced too high for many to be able to afford the large upfront cost.”

Covid-19 pandemic could reverse the affordability trend

While smartphone affordability has improved steadily over many years, the report warns that this trend could be reversed as a result of the Covid-19 pandemic which has disrupted supply chains and threatens to fuel poverty across the world as the full effect of pandemic’s economic disruption takes hold.

“The Covid-19 crisis has shown that to be without internet access can mean missing out on critical health advice, losing your livelihood and being cut off from your loved ones when physical distancing becomes the norm. The internet is a lifeline, and we need to do everything possible to remove the barriers that stand in the way of people getting online,” added Woodhouse.

The report calls for governments and multilateral organisations to use policy tools to reduce the costs of handsets for consumers, including:

– Reduce taxes on low-cost devices to bring down the purchase price of the cheapest devices and to encourage manufacturers and retailers to offer lower-priced products.
– Use universal service and access funds (USAFs) to subsidise devices for those least able to buy handsets.
– Support projects that help people spread the cost of devices, giving people access to credit and other financial tools so they do not need to pay the full cost of a device upfront.

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