Sunday, May 10, 2015

"Affordability" is the Biggest Internet Access Hurdle

“Unaffordability is the biggest hurdle” for billions of potential Internet access customers, according to Richard Thanki, University of Southampton graduate student.

Incomes are not high enough to cover costs of basic mobile broadband, Thanki said.

Today’s pricing of fixed, mobile and satellite access are “too costly” to reach two to 2.6 billion people, he said. Consider a monthly cost of $5.

For the “third billion” people on the planet,  average incomes are $5540 per year. That works out to $462 a month. So $5 represents about one percent of monthly income, generally meaning $5 a month is well within the range of affordability, using a five percent of household income affordability limit.

Fourth billion incomes average about $3000 a year, or $250 a month. People living in such households could afford $12.50 a month, using the fiver percent rule of thumb.

The fifth billion people live in households earning about $1771 per year, or about $148 a month. So five percent of that would be $7.40 a month.

The sixth billion cohort earns less. At perhaps $1000 annual income, the problems become more intense, implying monthly income of perhaps $83. At five percent of income, such households might be able to afford spending $4 a month, and no more.

The final billion people earn about $540 a year, or about $45 a month.

Using the five percent rule, such people might be able to afford about $2.25 a month.

No comments:

Sales Friction Creates Barriers to Buying Behavior

Sales friction occurs when a sales process is: too long (the line at the grocery store) too complicated (working with real estate agents) a...