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Prices fall, yet many still can’t afford smartphones

By Adeyemi Adepetun
07 September 2022   |   4:10 am
Despite drop in the prices of smartphones across the globe, a new study has revealed that billions of people across the globe, Nigeria inclusive, still cannot afford mobile devices.

• 2.5b people in Nigeria, others save 30% of monthly income to get devices
Despite drop in the prices of smartphones across the globe, a new study has revealed that billions of people across the globe, Nigeria inclusive, still cannot afford mobile devices.
The study conducted by Alliance for Affordable Internet (A4AI) says 2.5 billion people still pay more than 30 per cent of their monthly income to purchase the cheapest available smartphones.
Challenges posed by the global economic slowdown, low per capita income, gender disparities among others have continued to drive the low affordability of smartphones, especially in middle and low-income countries.
According to A4AI, a global coalition working to drive down the cost of Internet access in low- and middle-income countries through policy and regulatory reform, smartphones enable digital participation, but they remain unaffordable for many around the world and especially in low and middle-income countries.

It noted that for 2.5 billion people worldwide, buying the cheapest available smartphones would cost more than 30 per cent of their monthly income. A4AI said although the cost of a smartphone (expressed as a percentage of average monthly income) dropped two percentage points between 2021 and 2022, they remain unaffordable for many people, especially women and people living in rural areas.

Two vendors at the Computer Village market, Ikeja confirmed the actual sluggishness of the market despite have goods.

Emeka Nwajulu said though the economy has been very slow, especially when compared to pre-COVID-19 period, “but since the beginning of this year, despite price falls, people are not buying devices. We have markets that entered since last year, but we have not been able to sell them. People are not buying the goods.”

Corroborating this, Gbenga Adekunle, who deals in enterprise devices, including desktop, printers and smartphones, said prices of goods have come down but we don’t have people to buy them. You wont blame them, the hustle outside there is survival and ability to feed, that tells you the economy is grounded.”
Making matters worse, A4AI said that in some regions smartphones became even more unaffordable over the last year, stressing that on average, the cost of the cheapest available smartphones in South Asia increased by over 20 per cent between 2021 and 2022.
A4AI, which observed that of all the devices available with Internet capability, smartphones are generally the least expensive with characteristics that offer more than basic connectivity, said although its data cannot fully explain why levels of affordability range so greatly “but one reason could be the different types of smartphones available per country – the results strongly indicate that incomes alone are not behind these contrasts. When expressed as a share of income, any good with a fixed cost should become easier to afford as incomes rise. Despite this, our analysis indicates that levels of smartphone affordability ranges dramatically among countries with comparable incomes. For example, both Mozambique and Madagascar are low-income countries. However, when expressed as a share of income, the average person would have to spend three times as much to afford a smartphone in Madagascar as in Mozambique. In Zambia, for 23 per cent of monthly income, the level of smartphone affordability is just above the global affordability average of 20 per cent and comparable to the levels of affordability found in Turkey and Belarus, two upper-middle income countries.”

The Internet body said similar patterns can be found among low- and middle-income countries, stressing that in eight of the 37 lower-middle-income countries included in our data, smartphones are more affordable than the global average and smartphone affordability in these countries reaches as low as nine per cent in El Salvador.”
Further, A4AI analysis also demonstrated that providing affordable smartphones is not a luxury that only high-income countries can afford, instead, low-income countries can and, in several cases, already do, offer cheaper smartphones that more people can afford.
At present, it said countries are not doing enough to better understand what can be done to improve smartphone affordability.
Every two years A4AI said it conducts a policy survey in 72 countries to assess the policy environment of their ICT sector. These surveys, the body said it provides insights that allow A4AI to better understand whether and how governments are working to improve the affordability of the Internet and identify what works and what doesn’t.
In our last policy survey in 2020, 50 out of 72 countries surveyed did not include a target in their national broadband plans or ICT strategies that related to the availability and/or affordability of internet-enabled devices. This speaks to the lack of attention ICT ministries have paid to create strategies to ensure greater access to devices such as smartphones that allow users to connect to the Internet.

“We know improvement is possible, but there must be action from different stakeholders for it to happen. A concrete action that governments can take to change this reality and start paying attention to this issue will be to include targets in national broadband plans and ICT strategies around smartphone affordability. The private sector, civil society and international aid organisations should follow with innovative ways of financing smartphones and closing the gap in smartphone ownership. Subsidies and payment options should be alternatives considered by actors in the sector to provide smartphones where people have never had one, mainly in rural areas and to women and girls,” A4AI stated.
The Internet body said if more people around the world, and especially where it is less common, in LDCs, Sub-Saharan Africa and South Asia, had to access to smartphones these economies could see a boost in their economic growth. It stressed that there will be more users, such as an entrepreneur in Ghana that reported receiving and making payments for her business online through her phone, and another one in Lagos that reported running a part of her hairdresser business from her mobile phone.
“Once connected through a smartphone the possibilities of running a business online, selling and buying things, accessing jobs that were previously inaccessible, learning from others, and accessing telehealthcare become possible.
“Smartphone ownership might be one part of the meaningful connectivity story, but the potential impact of these small devices on access to an inclusive digital economy should not be ignored,” A4AI noted.