Broadband can cost more than $5,000 in emerging markets
Broadband costs in emerging markets are around three times more than in the rest of the world according to data from telecom analysts Ovum. Research in 15 emerging markets showed that consumers in these areas are paying for more than in the rest of the world even though they have lower wages.
"The cost of broadband in some emerging countries is three times as high as in mature markets, which when coupled with low wages, makes it an unaffordable luxury for all except a small group at the top of the socio-economic pyramid.
The striking difference in broadband prices in mature and emerging markets means there is a huge divide in terms of uptake of services."Angel Dobardziev, Ovum
In Nigeria the cost of some broadband services reaches over $2,000 per year despite the GDP per capita being only $1,170. South Africa had the highest prices of all with some services costing a staggering $5,000 with a national GDP of $5,820 per year.
The high cost in these areas can be put down to various factors. Prices reduce with demand, and in poor countries with low wages, there is little income left for purchasing technology. Therefore, where services are purchased, there is a lower take up which will drive up the average cost of providing the service per user.