Internet at What Cost?

1. The Evolution of the Internet

The rise of the internet in the 1990s has revolutionized the way we humans work, learn, commute, communicate and commercialize with each other. In the 1990s, you had to go to a bank to transfer money, go to the supermarket to buy groceries, buy new products in stores and use a map to travel to new locations. Now you can wire money with a simple scan or click of a button, get products and groceries delivered to your doorstep and use google maps if you get lost. Not only has the internet made our lives easier with google maps and amazon delivery, but it has become an essential and powerful tool that enables work, education, healthcare, women empowerment, sustainability, transparency, and more. Without the internet, we would not be able to work and study at home during the COVID-19 pandemic. It is why the World Bank announced that the internet is not a luxury but a basic necessity for economic, social, and environmental development.

So, how much of the world’s population has access to the internet? In 2020, only approximately 4.5 billion people had access to the internet, which is roughly 57% of the population. This means that 43% of the world’s population did not have access to this basic necessity. It is even direr in developing countries. According to WEF, as of 2020, fewer than 1 in 5 people in the least developed countries are online. In 2000, when 50% of the US population had access to the internet, 93% in the East Asia and Pacific region and 99% in South Asia and Sub-Saharan Africa were still offline. This changed 15 years later when the US access to the internet increased to 76%, but many countries from East and South Asia caught up. For example, 79% of people had internet access in Malaysia, 81% Singapore, 86% in South Korea, etc. On the other hand, since the 1990s, many low-income countries still had fewer than 5% of the population online.

Source: Our world in data

Furthermore, this uneven growth in internet accessibility and usage is not limited to geography, it is also visible demographically, between males and females across the world. Particularly, men remain 21% more likely to be online than women, rising to 52% in the world’s least developed countries.  

So, what enabled countries like the US, Japan, and Denmark to rapidly expand their internet access to their population while the others struggled to keep up? While there are many factors such as infrastructure, affordability, increasing user capabilities, etc., that could influence this. To start with, in this data story, we will be exploring the role of internet cost and how much it influences or affects internet access. 

We examine this question from the following perspectives:   

  1. Analyze the average cost of internet in high-income, middle-income, and low-income countries. 
  2. Analyze what percentage of households have internet access in high-income, middle-income, and low-income countries.  
  3. Compare the average cost of the internet with the percentage of households that have internet access in high-income, middle-income, and low-income countries.  
  4. Lastly, we look at the gender gap in internet access in high-income, middle-income, and low-income countries. 

1.1 Methodology

The data sets in this analysis are from 97 countries obtained from Inclusive Internet Index, Data World, Worldbank, and Cable.co.uk, for the years 2019-2020 (Gender gap and Household internet coverage data) and 2020-2021 (Internet cost data). These data sets represent the cost of the internet, the percentage of households with internet access, and the percentage of the gender gap in internet access. For this analysis, these data sets are categorized into high-income (37 countries), upper-middle-income (24 countries), lower-middle-income (26 countries), and low-income groups (10 countries). In the case of gender gap data, the positive values indicate that male access exceeds female access, while negative values indicate that female access is greater. 

2. Internet at What Cost?

2.1. Income-wise Average Costs of 1 GB Internet

Average Internet Costs 

Based on our data of 97 countries, on average people pay US$ 3.36 for 1 GB of internet. Compared to this average cost of 1 GB internet: 

  1. High-income countries pay 12.25% more than the average, which is US$ 3.78.  
  2. Upper-middle income countries pay 5.3% less than the average, which is US$ 3.18. 
  3. Lower-middle income countries pay 33.33% less than the average, which is US$ 2.16.  
  4. Low-income countries pay 41.79% more than the average, which is US$ 5.36.  

2.2. Region-wise Average Costs of 1 GB Internet 

Comparing Internet Costs 

A closer look at the average internet cost regionally in figure 2, we find the following: 

  1. North America pays 205% more than the average, which is US$ 10.27.  
  2. Sub-Saharan Africa pays 49.97% more than the average, which is US$ 5.033.  
  3. Latin America pays 5% less than the average, which is US$ 3.192.  
  4. East Asia pays 16.1% less than the average, which is US$ 2.817.  
  5. Europe pays 19.4% less than the average, which is US$ 2.707.  
  6. Middle East pays 28% less than the average, which is US$ 2.416 
  7. South Asia pays 85.17% less than the average, which is US$ 0.498.  

If we compare figures 1 and 2, we can observe the following: 

  • South Asia could be bringing down the average internet cost for the lower and upper-middle-income countries. South Asia pays 85.17% lesser than the average internet cost of the world. Since many lower and upper-middle-income countries are in South Asia, it may explain why lower and upper middle income are paying 33.33% and 5.33% less than the average cost of the world. 
  • North America and Sub-Saharan Africa could be bringing up the average internet cost for the higher and low-income countries, respectively. North America and Sub-Saharan Africa pay 205% and 49.97% more than the average internet cost of the world. This could explain why high-income and low-income countries pay 12.25% and 41.79% more than the average cost of the internet. 

Internet Costs and Monthly Income 

These disparities in internet costs become direr when we look at the monthly income of households of these countries. A study showed that high-income countries typically pay less than 1% of the average monthly income for 1GB of data. On the other hand, the figure in Africa reaches 9%. So, what does this mean? Take the example of the US, where a person is earning an average annual salary of approximately US$ 59,160. If they pay according to high-income countries of less than 1% of average monthly income, they will pay US$ 49 for internet per month, which is very much manageable. However, if they pay according to Africa of 9%, they will pay US$ 443 for internet per month, which is quite expensive.  

Therefore, a person living in a low-income country not only has to pay 41.79% more than the average internet cost of the world, but they also must pay more out of their own pocket every month. These two factors combined make it challenging for people in low-income countries to afford and access the internet. All of this leads to our next question, how much does the cost of the internet influence the adoption of the internet in households in high-income, middle-income, and low-income countries. 

3. Internet Cost & Household Internet Access

3.1. Percentage of Households with Internet Access vs Average Internet Costs

Percentage of Households with Internet Access 

Figure 3 represents the percentage of households using the internet via computers, mobile phones, and digital televisions in high-income, middle-income, and low-income countries: 

  1. High-income countries’ household internet coverage ranges from 71-100%, with an average of 88.6%. 
  2. Upper-middle income countries household internet coverage ranges from 52-87%, with an average of 59.5%. 
  3. Lower-middle income countries household internet coverage ranges from 7-79%, with an average of 31.6%. 
  4. Low-income countries’ household internet coverage ranges from 0.3-33%, with an average of 11.8%. 

Observing figure 3 and its data, we can see that high-income, upper-middle-income, and low-income countries fall within the variation range of 29% (100-71), 35% (87-52), and 32.7% (33-0.3). This means there are fewer outliers, and many countries fall within the average range of household internet coverage. However, the same cannot be said for lower-middle-income countries where the variation range is 72% (79-7). This means there are many outliers, and many countries will not fall within the average range of household internet coverage.  

3.2. Average Percentage of Households with Internet Access 

The Trend in Internet Access 

As we move from high-income to low-income countries, there is a steady decrease in the percentage of households with internet access.  

  1. High Income to Upper Middle Income – 29.1% decrease in households with internet access.  
  2. Upper Middle to Lower Middle Income – 28.4% decrease in households with internet access.  
  3. Lower Middle to Low Income – 18.26 decrease in households with internet access.  

Looking at this data, we can draw the correlation that as the income of a country decreases, there is a decrease in households with internet access. The opposite works as well. As the income of a country increases, there is an increase in households with internet access.  

Internet Cost and its Influence on Internet Access 

So, to determine whether internet costs influence the percentage of household internet access, we compare figure 1 (average cost of 1 GB internet in 97 countries) and figure 4 (average percentage of households with internet access) 

  1. High-income countries pay 12.25% more than the average cost of the internet, which is the second most expensive. However, they have the highest household coverage with 88.6%. 
  2. Upper-middle income countries pay 5.3% less than the average cost of the internet, which is the second cheapest and they have the second-highest household coverage with 59.50%. 
  3. Lower-middle income countries pay 33.33% less than the average cost of the internet, which is the cheapest. However, they have the second-lowest household coverage with 31.06% 
  4. Low-income countries pay 41.79% more than the average cost of the internet, which is the most expensive and they have the least household coverage with 11.80%. 

So, does this mean internet costs do not play a role in internet access? Let us start with high-income countries. Even though high-income countries have the second most expensive cost of internet, it has the highest household coverage. So, the correlation indicates that internet costs do not play a role in internet access in high-income countries. Taking our previous United States example, if someone is earning an annual salary of US$ 59160 and has to pay an extra 12.25% more than the global average for internet access (which is only US$ 0.42 more), it may not affect them as much. 

  • Upper-middle income countries on the other hand pay the second cheapest and have the second-highest household coverage. Here the correlation indicates that internet cost does influence internet access in upper-middle-income countries. Since the average salary for a person is lower in upper-middle-income countries when compared to high-income countries, cheaper internet allows for more households to get access to it.  
  • Moving on to the lower-middle-income countries, we observe that it has access to the cheapest internet cost among the 4 income groups. However, it has the second-lowest household coverage. So, the correlation indicates that internet costs do not play a role in internet access in lower-middle-income countries. Going by upper-middle-income countries logic, cheaper internet should have ideally meant more access, but that is not what see with lower-middle-income countries. Therefore, while internet cost plays a key role in internet access, it might not be the only determining factor.  
  • Finally, looking at lower-income countries, we observe that it has the most expensive cost of internet and has the least household coverage. Here the correlation indicates that internet cost does influence internet access in upper-middle-income countries. In lower-income countries, data indicates that internet cost plays a more pivotal role in internet access. 

So, what can we conclude from this? From this data, we can say that internet costs do play a role in household internet access. However, it is not the only determining factor, and the extent to which it affects household internet access depends on the income group of the country.  

  1. In higher-income countries, expensive internet costs may not play a key role in higher internet access. 
  2. In upper-middle-income countries, cheap internet costs may play a relatively significant role in higher internet access.  
  3. In lower-middle-income countries, even though internet cost is the cheapest, it did not convert to higher internet access. This means cheap internet may not have a vital role in internet access for lower-middle-income countries.  
  4. Finally, in lower-income countries, expensive internet costs may play an important role in higher internet access.  

4. Internet and Gender Gap

4.1. Percentage of Households with Internet Access and Percentage of the Gender Gap in Internet Access

Figure 5 and figure 6 compare the percentage of household internet access with the gender gap in internet access across high-income, middle-income, and low-income countries. 

  1. In high-income countries 
    1. The gender gap ranges from –5.9% in Ireland to 13% in Japan, falling within a small variation range of 18.9. This means there are fewer outliers, and many countries fall within the average gender gap in internet access.  
    2. The average gender gap in internet access is 3.65% 
    3. The average internet access is 88.6% 
  2. In upper-middle-income countries 
    1. The gender gap ranges from 7.9% in China to 32% in Japan, falling within a slightly higher variation range of 24.1. This means there are slightly higher outliers. However, most countries will fall within the average gender gap in internet access. 
    2. The average gender gap in internet access is 8.46%. 
    3. The average Internet Access is 59.5% 
  3. In lower-middle-income countries  
    1. The gender gap ranges from -14% in the Philippines to 71% in Pakistan, having a higher variation range of 85. This means there are many outliers, and many countries will not fall within the average range of household internet coverage.   
    2. The average gender gap in internet access is 23.16%. 
    3. The average internet access is 31.6% 
  4. In lower-income countries  
    1. The gender gap ranges from 0% in Mozambique to 62% in Malawi, having a higher variation range of 62. This means there are many outliers, and many countries will not fall within the average range of household internet coverage.  
    2. The average gender gap in internet access is 32.74%. 
    3. The average internet access is 11.80% 

So, what can we infer from these data points? High-income countries have the least gender gap (more women have access to the internet) and the highest household internet access. Upper-middle income countries have the second least gender gap and the second-highest household internet access. Lower-middle income countries have the second-highest gender gap (fewer women have access to the internet) and the second least household internet access. Finally, lower-income countries have the highest gender gap and the least household internet access.  

To summarize, as we move up the income group from lower-income to higher-income, we can observe that the gender gap in internet access decreases and household internet access increases.   

5. The Internet Story

So, what has been uncovered in this data story? 

  • Income-Wise Average Internet Costs for 1 GB Internet 
    • High-income and low-income pay above-average internet costs for 1 GB of internet. 
    • Upper-middle income and lower-middle-income countries pay below-average internet costs for 1 GB of internet. 
  • Region-Wise Average Internet Costs for 1 GB Internet 
    • North America and Sub-Saharan Africa pay above-average internet costs for 1 GB of internet. 
    • East Asia, South Asia, Europe, Latin America, and the Middle East all pay below-average internet costs for 1 GB of internet. 
  • Comparing Income-Wise & Region-Wise Average Internet Costs for 1 GB Internet 
    • North America and Sub-Saharan Africa could be bringing up the average internet cost for the higher and low-income countries, respectively. 
    • South Asia could be bringing down the average internet cost for the lower and upper-middle-income countries. 

Taking a closer look at why the average internet costs are high in low-income countries. A4AI classifies the affordable rate of the internet as 2% of monthly income. As we have seen, low-income countries, especially, Sub-Saharan African countries’ pay 7-10% of their monthly income, making the internet challenging to access. The reason for the high cost of internet access can be attributed to four components: local access, link to national and international networks, and access to submarine cables.   

Another vital factor about these internet costs is that they are predominantly fixed costs. There is a sizeable up-front investment that each country needs to make. But once invested, there is a relatively small cost for expansion. As a result, if countries increased their capacities for such investments, internet costs can drastically reduce. However, not every country can do this, especially in low-income countries. Such regions may suffer from higher unit costs which then typically lead to higher internet prices for people. This could be why we observe high internet costs in low-income countries and Sub-Saharan Africa. 

The percentage of households using the internet via computers, mobile phones, and digital televisions in high-income, middle-income, and low-income countries: 

  • High-income countries pay 12.25% more than the average cost of the internet, which is the second most expensive. However, they have the highest household coverage with 88.6%. Therefore, in higher-income countries, expensive internet costs may not play a key role in higher internet access. 
  • Upper-middle income countries pay 5.3% less than the average cost of the internet, which is the second cheapest and they have the second-highest household coverage with 59.50%. Therefore, in upper-middle-income countries, cheap internet costs may play a relatively significant role in higher internet access. 
  • Lower-middle income countries pay 33.33% less than the average cost of the internet, which is the cheapest. However, they have the second-lowest household coverage with 31.06%. This means cheap internet may not have a vital role in internet access for lower-middle-income countries. 
  • Low-income countries pay 41.79% more than the average cost of the internet, which is the most expensive and they have the least household coverage with 11.80%. Therefore, expensive internet costs may play an important role in higher internet access. 

We can infer that internet costs do play a role in household internet access. However, it is not the only determining factor, and the extent to which it affects household internet access depends on the income group of the country. There are other factors such as the share of out-of-pocket expenditure on the internet, internet infrastructure and technological reach in different countries, user capabilities in terms of digital literacy, language literacy, and lack of incentives to adopt internet technologies and services. 

For example, a recent study by the Alliance for Affordable Internet (A4AI) and the Web Foundation concluded, “mobile devices, once seen as consumer luxuries, are today the essential first step to getting online. But for billions of people around the world, they remain too expensive.” The lack of access to mobiles is a significant step back in bridging the digital and internet divide across the world. This is because mobile phones are the cheapest devices through which the internet can be accessed. According to their survey of 70 countries, Botswana topped the list of the most affordable devices, with a low-cost smartphone priced at just 4% of average monthly income. This could be one of the factors why Botswana has 45% of households with internet access.  

Percentage of households with internet access vs percentage of the gender gap in internet access 

  • High-income countries have the least gender gap (more women have access to the internet) and the highest household internet access.  
  • Upper-middle income countries have the second least gender gap and the second-highest household internet access. 
  • Lower-middle income countries have the second-highest gender gap (fewer women have access to the internet) and the second least household internet access.
  • Finally, lower-income countries have the highest gender gap and the least household internet access.  

To summarize, as we move up the income group from lower-income to higher-income, we can observe that the gender gap in internet access decreases and household internet access increases.   

Bridging the Digital Gap 

So, what do the disparities in internet access mean for the global future? A 2019 study stated that by 2022, 60% of global GDP could be digital. What impact this will have on our education, society, governance, and economy are largely unknown. However, what is clear is that urgent action is needed to ensure the benefits of these transformations are distributed equally. Digital inequality will most certainly further the gap of income inequality. We are witnessing this in our current ongoing COVID-19 pandemic. People who had access to devices and the internet continued to work, study and find opportunities. However, the people who did not have access to these necessities fell further behind.  

To bridge the digital gap, the world needs to work towards affordable internet access for all (SDG target 9.c), ensure equal access to basic services and technology for all gender (SDG target 1.4), and implement policies to empower women through technology (SDG target 5.b) by 2030. Allowing for better access to information and communication technology (ICT) will also help in achieving SDGs such as quality education (SDG 4), decent work and economic growth (SDG 8), and reducing inequalities (SDG 10). 

To know more about the role of SDGs, watch our 10-part animated series here.

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