Page 4 - The affordability of ICT services 2023

The affordability of ICT services 2023

Figure 4: Real percentage change of basket price in local currency, 2022 to 2023

Mobile broadband basket Fixed broadband basket

Income Income

Africa Arab States Asia-Pacific CIS Europe Americas World LDCs LLDCs SIDS Low Lower-middle Upper-middle High Africa Arab States Asia-Pacific CIS Europe Americas World LDCs LLDCs SIDS Low Lower-middle Upper-middle High

0 0
-2.5 -2.5 -0.5 -3.0 -0.5
-4.5 -4.0 -3.0 -3.0 -3.0 -3.0
-4.0 -4.0 -4.0 -4.0 -4.0 -4.0
-5.0 -5.0
-5 -6.0 -5 -6.0
-7.0 -7.0 -7.0 -7.0 -6.5
-8.0
-9.0

-10 -10

Note: Chart shows the median of the data-only mobile and fixed broadband basket prices in local currency adjusted by consumer price indices (CPI)
obtained from the IMF. June 2023 year-on-year CPI rates applied.
Source: Based on ITU and IMF data
capita levels (used as the denominator for measuring ICT services resisted the global
affordability) made ICT services less affordable than
3
before the pandemic. However, in the two years following inflationary pressure
2021, the price of all baskets expressed as a percentage of
GNI per capita improved significantly, reaching historical
lows in 2023. Despite the inflationary context—with average year-on-
year inflation reaching 5.7 per cent in June 2023 for the
The Africa region had the least affordable ICT service countries studied, the global median price of data-only
5
prices in 2023, and although the reduction in prices for mobile-broadband and fixed-broadband baskets barely
the data-only mobile-broadband basket as a percentage changed in nominal terms and decreased by 4 per cent in
of GNI per capita is encouraging, further acceleration in real terms, although there were variations across regions
this direction is needed for this region to reach the two per and income groups (Figure 4). The magnitude of price
cent target by 2025. changes in real terms showed significant variation across
Affordability has improved in nearly all regions, albeit with baskets, regions and income groups. For instance, the
some notable exceptions. Diverging from the global trend data-only mobile-broadband basket price dropped the
of declining basket prices expressed as a percentage most in Europe (by 9 per cent), in low-income economies
of GNI per capita, the fixed-broadband basket prices (by 8 per cent) and in Africa (by 8 per cent), while it hardly
mostly stagnated in the Americas and the Asia-Pacific changed in SIDS.
regions, and even increased in CIS countries. The Arab
4
States region saw an improvement in fixed-broadband
affordability in 2023, reversing the prolonged impact of Trends for selected price baskets
the COVID-19 pandemic in that region.

ICT prices in Europe continue to be low relative to income,
with further improvements observed in 2023, when none Data-only mobile-broadband basket
of the basket medians exceeded 1 per cent of GNI per
capita. The entry-level data-only mobile-broadband basket is
a useful benchmark when comparing prices of mobile
broadband services. The global median price of this
Due to data availability, affordability is calculated every year using
3 basket decreased from 1.5 to 1.3 per cent of GNI per
one-year lagged GNI per capita levels. Hence the 2020 to 2021 capita from 2022 to 2023. Affordability gaps for this basket
affordability change was affected by the -1.9 per cent median global are widest between income groups, the median price
annual change in nominal GNI per capita from 2019 to 2020. Similarly,
the 2021 to 2022 affordability change was shaped by a 9.0 per cent in low-income economies (expressed in per cent of GNI
increase in GNI per capita, and the 2022 to 2023 change by 12.4 per per capita) is about 21 times higher than in high-income
cent. economies. Although this means the affordability gap
4 In four out of the nine countries of the CIS region prices are
consistently below the 2 per cent target, while another four countries
have GNI per capita rates consistently above 3 per cent of GNI per
capita. As this region has the fewest countries, a price increase in one 5 Based on monthly consumer price indices from the International
country in 2023 had an outsized effect. Monetary Fund.

March 2024 4