Internet prices in Africa: a comparative study

Internet prices are set in different ways in different countries. Often the customer has to pay part of the subscription in local currency and part in US dollars. Comparison between countries therefore becomes difficult and misleading. For this paper, Olof Hesselmark located the prices for a standard package consisting of the annual cost of a dial-up Internet service with 10 hours of day-time use per month, including telephone charges. The cost is given both in local currency and in US$, using the exchange rate of October 25-30 of 2003.

Bandwidth continues to be expensive. In many countries the telecom monopoly insist on remaining the sole supplier of international gateways and bandwidth. In many cases they deliberately hold back the supply of international bandwith, creating imbalances betweeen the demand and supply. The resulting high prices create sometimes large profits for the monopolies. The charges for bandwidth are outrageous, sometimes ten times higher than what can be obtained from independent suppliers of satellite connections6. 10 000 to 20 000 US$ per month per Mbps are the current prices charged in several countries. An ISP that has to pay 240 000 dollars per year for bandwidth needs the revenue from 600 customers before other costs begin to be covered.

Read the full paper (4 p., 03-11-2010)

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