Sunday, February 3, 2019

IS Cost of Internet Access a Problem? Yes and No

People sometimes complain about high prices for U.S. internet access. As a percentage of household income that is not true, in the United States or any other developed nation, but people believe the “high price” charge anyway.

According to the International Telecommunications Union, prices adjusted to reflect purchasing power parity across nations suggests mobile broadband cost perhaps $15.90, in 2015, in developed nations, compared to a world average of $26.70 and far lower than the $30.80 paid in developing countries or $39.90 in lesser developed countries.

Looking at fixed broadband prices, customers in developed countries paid about $27.80 in 2015, compared to the world average of $56.30, the developing country cost of $67.30 and the lesser developed country average of $134.

LIkewise for mobile broadband, which in developed countries costs one percent of gross national income per person, compared to the world average of five percent, the developing country average of perhaps 7.5 percent and the lesser developed country average of about 16.5 percent of GNI per person.


Population density and country size do play a role in the cost of providing service to customers. Large countries and countries with large rural areas will find high costs to serve customers in rural areas. In Canada, 90 percent of people can be connected using facilities that cover just 3.3 percent of the land mass.

In Australia, 90 percent of people can be connected using facilities that cover just 4.32 percent of the land mass. In the United States, connecting 90 percent of people can be connected using facilities covering about 31 percent of the land mass.

The point is that costs to connect rural customers will be quite high in countries with huge areas of sparse population.

source: Deloitte

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