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July 25, 2017

Internet Access Comes With a Cost in Emerging Economies

When web expert and BluPoint founder Mike Santer toured sub-Saharan Africa to ask what people were getting from the Internet, he thought he would see smiles all round. Instead he was shocked. “You’re not aware how costly it is for people to get online in Africa,” he says.

“In rural areas, people were spending up to 70 percent of their total income on their mobile phone, buying top-ups. I spoke to mothers in Malawi who could not send all their children to school because they would not have enough money for their mobile phones.”

The stories taught Santer a lesson: for people such as a Malawi teacher who would have to spend a full month’s pay just for a single iTunes movie download, the oft-cited mantra that the internet makes you better off simply does not hold true.

Instead, in Africa “many people are making very harsh choices to connect,” Santer says.

This is not to say we should give up trying to connect these people. But those in charge need to be smart about how they design and roll out programs. It is vital to work closely with people on the ground to make sure funding yields real results.

It is also key to find ways to help even the poorest afford Internet access. This is what Santer chose to do after his visit to Africa. He set up BluPoint, which aims to offer offline content to those who cannot access the internet due to cost, coverage, or device capability.

To date, the startup has brought online access to 50,000 people in Kenya, South Africa, and Tanzania.

It uses a solar-powered ‘pop-up intranet’ service that re-renders content so it can be accessed, for free, from all phones—even those that don’t have an Internet connection or a browser.

Santer explains that the system is funded by bodies such as health or education agencies, international non-governmental organizations, or commercial entities, looking to extend their reach to the 4.1 billion people worldwide who do not have internet access.

In a paper published last year, Nicolas Friederici, Sanna Ojanperä, and Mark Graham of the University of Oxford laid out the impact IT can have on poor nations. “Corporations, development organizations, and governments have launched ambitious programs reasoning that this creates economic growth and inclusive development,” they say.

Despite that, “The evidence suggests a highly uneven economic impact of internet connectivity across geographies and social strata,” say the team.

What is going wrong? Research, after all, shows the Internet can indeed help usher in greater riches in well-off nations.

In a 2011 report, for instance, the McKinsey Global Institute claims that 21 percent of growth gross domestic product over five years was due to the Internet in well-off nations. But in poorer nations things are more complex. Lack of rival players often keeps access prices high. Leaders may sign off big programs to get votes rather than create progress. And, of course, people on the street are a lot less likely to have enough money to make the most of the internet.

In fact, Santer says, in sub-Saharan Africa “only 23 percent of the phones that people have in their pockets are smart.”

It’s complex,” says the Oxford Internet Institute‘s Nicolas Friederici. “It’s not an input-output thing, where you put Internet in and get prosperity out.”

Take a farmer, he says. Standard wisdom says giving the farmer access to the Internet could help them learn how to grow more crops and earn more money.

But in a rural village there could be other factors at play, such as local soil and weather conditions, or a middleman who takes any surplus, which means the cash that goes into an internet access program is wasted.

Compared to well-off nations, in many African countries “the poor often don’t have the capacity to make use of the Internet in a way that would enhance their output,” Friederici says.

But with help from corporations, that could change, according to Santer. He thinks even big mobile phone brands might want to get involved. After all, if the access is free then maybe it can improve fortunes after all… and allow more people to pay for Internet access at some point in the future.


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Jason Deign is a Barcelona-based business writer, journalist and author. Besides writing, he is regularly interviewed by the media and has been featured in the UK's Daily Mail and The Guardian, among others. Used with the permission of http://thenetwork.cisco.com/.

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