What 2% of GNI per Capita Implies About Network Choices

One measure of internet access affordability used by governmental and other agencies are target prices for retail access no higher than two percent of gross national income (GNI) per capita, for gigabyte usage allowances. 

As a practical matter, that implies use of a mobile network, given the cost differences between a mobile and a fiber-to-home network. 

The varying GNI per capita in developing countries also poses an issue. When adjusted for purchasing power parity, many countries have GNI per capita below $15,000 per year, for example. So two percent of $15,000 implies annual spending for internet access no higher than 

$300, or about $25 per month. 

Fixed network costs might be possible at that level, but not very often, and then only assuming the household used zero mobile services. Since most people prefer mobile over fixed service, if they must make a choice, that further ensures that mobile networks will be the focus of reaching the two-percent of per-person GNI targets.  

In countries with lower PPP GNI per capita, where the level might be $3,000 per year, annual internet access cannot cost more than $60, or about $5 a month. Under those circumstances, a fixed network might be virtually impossible. But most countries would have a chance to supply internet access at such prices, using a mobile network. 

One can operate a mobile network, especially using 3G or 4G, and remain in business, with a moderate amount of competition, supplying 1 GB of data usage per month, in most countries. 

Of course, average global data consumption already exceeds 15 GB per month, according to Ericsson figures. Smartphone data consumption in 2023 will be in the range of 20 GB per device. 

source: Ericsson 

Such retail cost targets also condition the level of investments that can be made which are sustainable, as well as the platforms and packaging strategies that might be necessary. Phone accounts obviously have some upside from voice and text messaging, sometimes banking or payments revenues, even when fixed network revenue streams are not available. 

source: Omdia, World Broadband Association

Still, for most service providers in most markets, internet access remains the growth driver of greatest importance.  And most internet service providers, in the toughest markets, will rely on mobile networks to provide access. FTTH economics simply are not feasible in markets where total monthly spend on internet access is a few dollars per month.