BDT Director Doreen Bogdan-Martin was a guest speaker at a webinar organized by WTO around new trade rules to promote universal affordable connectivity.
In a lively discussion moderated by Nick Ashton-Hart, Geneva Representative of the Digital Trade Network, Ms Bogdan-Martin was joined by experts from government private consultancies, and regional organizations, including: H.E. Monique van Daalen, Ambassador, Permanent Representative to the WTO, Kingdom of the Netherlands; Daniel Crosby, Partner, King & Spaulding; Kejpiroon Kate Koshuwan, Deputy Director-General, Department of Trade Negotiations, Kingdom of Thailand; and Dr Ally Simba, Executive Secretary, East African Communications Organization (EACO). ITU expert Sofie Maddens, Head of Regulatory & Market Environments also joined the debate.
The session opened with the observation that while e-commerce creates new opportunities for developing countries, especially for SMEs, youth and women, more than three billion people remain unconnected, often because of issues around broadband affordability. The panel was asked to consider what elements of trade law impact broadband cost, and whether more could more be done through new rules to accelerate bridging the digital divide.
“Policies to substantially improve affordability would clearly represent one huge leap forward in putting digital services within reach of billions," said Ms Bogdan-Martin, noting that the Broadband Commission for Sustainable Development set a target stating that 1GB of data should not cost more than 2% of monthly per capita income – known informally as the '1 for 2' benchmark.
Ms Bogdan-Martin noted that it is in the world's poorest countries, where people are least able to pay and where online access could potentially be most powerful, that the cost of getting online remains prohibitively expensive. Research shows that across low and middle-income countries, 1GB data on average costs more than double the '1 for 2' affordability benchmark . On the African continent that figure rises to more than 7%, making access unaffordable for many hundreds of millions. In the very worst cases, the cost of getting online can represent as 40% of average monthly revenue. According to the latest report from the Broadband Commission, a least 1.3 billion people are living in countries where entry-level mobile data plans are not affordable.
Ms Bogdan-Martin noted that access costs are only a part of the picture. “Last year's State of Broadband report noted that the affordability of internet-enabled handsets also remains a challenge, with the cost of an entry-level device still more than 20% of average monthly income in low- and middle-income countries. In some countries, lack of market competition keeps prices high. The Alliance for the Affordable Internet last year estimated that some 900 million people live in countries where the cost of access is kept artificially high by insufficient competition.
“High prices for devices and access also serve to exacerbate the digital gender divide, with women disproportionately occupying lowly paid or unpaid roles and struggling with lower incomes," she said. “We know that getting the policy mix right constitutes a major lever in bringing down prices. In particular, regulatory measures around competition and taxation can have a powerful effect in nurturing thriving national markets for broadband services."
She observed that last year's State of Broadband report cited GSMA research indicating over 100 instances of the introduction or increase of mobile sector-specific taxes in recent years, a third of which were observed in Sub-Saharan Africa.
