Inflation, devaluation push smartphone prices in SSA above 26% of monthly income
• Nigerians, South Africans, Kenyans spend 45% more of earnings
With COVID-19 demonstrating how smartphones have become an essential device in meaningful connectivity, a new research has shown that people in sub-Saharan Africa (SSA) are paying more to have access.
Similarly, high inflation and currency devaluation in Nigeria and some of the countries within the region have made smartphones inaccessible for many.
Alliance for Affordable Internet (A4AI), which authored the research, informed that though smartphones had provided access to life-saving information, enabled students to continue their studies online, and fostered social connection, they remained unattainable for many around the world due to high cost.
With focus on 187 countries, A4AI found that the global average cost of a smartphone is around 26 per cent of an average monthly income, $104. However, there are significant divisions in affordability between regions and countries that suggest smartphones remain inaccessible to many.
According to the study, in some regions, people would have to spend far more than the global average. For example, in South Asia and SSA, the number surpasses 40 per cent. Even worse, in the Least Developed Countries (LDC), the average person would have to spend over half of their monthly income to buy a smartphone. Those in low-income countries have to spend almost 70 per cent of their average monthly income to purchase the cheapest available smartphone on the market.
Instructively, in SSA, it means that countries like Nigeria, South Africa, Kenya, the people pay 45 per cent of their monthly income to purchase smartphones.
In sharp contrast, A4AI observed that in regions such as Latin America and the Caribbean that have higher average incomes, the cheapest smartphone on the market represents only 14 per cent of their monthly income. In North America, that number drops even further to just a mere two per cent.
Massive disparity persists between high- and low-income countries with respect to connectivity. It also demonstrates that, as smartphones become increasingly important income-generating tools, the areas where they may be most needed will also be the areas where they will be most scarce.
According to the report, not all devices are created equal. It pointed out that some countries have more devices than others, and the reference device varies by country.
“We recorded the cheapest smartphone and feature phone in each country, offered by leading operators in each country.
“Overall, we find shocking disparities in mobile affordability between countries — and cases with the least affordability are not necessarily in countries with lower average incomes. Instead, in many cases, markets that only offer consumers a limited selection of high-end brands and devices affect the position of these countries in the data.
“For example, the most affordable phone offered in Azerbaijan is the iPhone 12 mini — which costs more than three times the country’s average monthly salary. In contrast, the most affordable economies such as the United Kingdom, Ireland, and Turks & Caicos, all offer Alcatel phones as their cheapest, a brand notable for its lower prices,” A4AI stated.
Accordingly, the report said this reality showed one of the ways operators could play a role in advancing affordability, by diversifying their inventory to offer a variety of brands and enabling greater consumer choice as they leverage their role as a trusted source within the digital ecosystem for many users, especially those in low- and middle-income countries connecting for the first time.
Despite the differences in product offerings across markets, certain brands of smartphones recur as the most affordable device across different countries.
According to the report, for millions of people around the world, these devices are gateways to Internet access. Alcatel and Samsung were the leading brands in A4AI dataset, with Alcatel present in 18 per cent of the markets as the cheapest brand available, and Samsung offering the most affordable smartphone in 28 of the 187 economies studied.
By brand, A4AI said the cost of an Alcatel is 17 per cent of average monthly income, while for Samsung the affordability goes up to 42 per cent relative to incomes in the markets where it was the cheapest device.
“Beyond commercial brands, a common practice in several markets, are devices sold under the name of the mobile network operators, produced by an original design manufacturer and commonly known as ODMs. In 19 per cent of countries, these types of devices – which are offered by network operators such as Orange, Digicel, and Vodafone – are the most affordable. On average, these devices cost under $30 each. Both the Alcatel and ODM smartphones are key to onboarding new users at an affordable price and close the digital divide,” it stated.
While smartphone ownership continues to increase, over 140 of the operators analyzed also offered feature phones, which are Internet-capable mobile devices that resemble earlier mobile models with tactile keyboards or keypads and only support basic applications. When high device costs keep millions offline, feature phones are often affordable alternatives to smartphones to connect to the Internet, especially for first-time users.