South African broadband prices low enough?

The Broadband Commission has set a broadband price target of no more than 5% of GDP per capita by 2015 – this is how South Africa compares

By - July 20, 2013
Broadband

The Broadband Commission, an international body set up by the ITU and UNESCO, has a 2015 broadband affordability target aiming for entry-level broadband services to cost less than 5% of the average monthly income in a country.

This forms part of the Broadband Commission’s other 2015 targets which include:

  • Making broadband policy universal. By 2015, all countries should have a national broadband plan or strategy or include broadband in their Universal Access / Service Definitions.
  • Making broadband affordable. By 2015, entry-level broadband services should be made affordable in developing countries through adequate regulation and market forces (amounting to less than 5% of average monthly income).
  • Connecting homes to broadband. By 2015, 40% of households in developing countries should have Internet access.
  • Getting people online. By 2015, Internet user penetration should reach 60% worldwide, 50% in developing countries and 15% in LDCs.

South Africa’s government wants all its citizens to have broadband access by 2020, but to date details on how this will be achieved remain sketchy.

One of the most important aspects of making broadband available to more people is affordability. The cheaper broadband access is, the more people will subscribe to these services.

This raises the question of how far South Africa is from the Broadband Commission’s entry-level broadband cost target – 5% of average monthly income.

Fixed broadband pricing in South Africa

Telkom’s entry level 1Mbps uncapped ADSL service costs R477.37 per month.

The average monthly earnings paid to employees in South Africa in the formal non-agricultural sector is R13,981 per month (Stats SA).

This means that 5% of the average monthly income in South Africa is R699 – much higher than the R477.37 per month which Telkom charges for an entry level fixed broadband service.

This means that South Africa’s entry level broadband prices already satisfy the Broadband Commission’s 2015 broadband affordability target.

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