Arturo Muente-Kunigami's blog

Broadband Affordability - We're still not there yet

Population that cannot afford Broadband

Building smarter cities

For the first time in history, more than half of the world’s population lives in cities. Over 90 percent of urban growth is occurring in the developing world, adding an estimated 70 million new residents to urban areas each year. Demand for services in urban areas is therefore increasing exponentially, and the capacity of local governments to manage this demand is challenged.

Moreover, even though private sector has been successful in leveraging technology to improve service delivery and efficiency, governments have failed to fully embrace the benefits that these innovations bring. There is a growing need for governments to be able to deliver more services in a more efficient and effective way with limited resources. Cities need to innovate and create new tools and approaches.

How affordable is broadband?

3.5 billion people do not have access to affordable broadband

(Note: China and India were broken out in this graph due to the distorting effect of their populations on the estimations per region.)

According to the International Telecommunications Union (ITU), broadband can be considered affordable when it is at or below five percent of the average monthly income[1]. Statistics are usually reported on country averages; under a “Broadband for All” objective, it might be useful to realize that behind averages income is distributed unevenly among the population of a country. That is, even if broadband prices are effectively under five percent of the average monthly income of a country, that same price indeed represents a higher share of the income of the poorest segments of the population.

In this blog post, I will try to show the differences that averages hide, as well as highlight the importance of addressing specific segments of the population, especially when dealing with the bottom 40 percent of the population, which are – almost by definition – usually underestimated on average.

Using statistics from ITU and World Development Indicators (WDI), I have tried to calculate (grossly and certainly with lots of room for improvement) a tool to measure this “affordability gap” between countries and – more importantly – within countries.