The Covid-19 pandemic has shown just how important connectivity is in the modern world. With the cessation of movement, it has become more challenging to communicate directly. As such, the use of ICT has become even more critical for the dissemination of information by government, experts, and the media.
What has emerged is that the key to digital communication is the phone especially the smartphone. A smartphone allows people to stay in touch with their friends and families, receive important information, and also educate themselves during these tough times. Smartphones may even become more crucial when the outbreak is finally brought under control.
However, the cost of handsets is a significant barrier to mobile Internet adoption and use. Research in countries like Tanzania and India found that the extremely poor that is those who earn less than $2 per day would have to spend 16% of their annual income just to purchase an average priced smartphone. For people who are struggling to eat on a daily basis, using this percentage of their income is not a rational option.
One of the reasons smartphones are expensive in Kenya, and Africa as a whole, is high taxes. In fact, import taxes and duties can reach as high as 50% of the total device cost in some countries. Others are high costs for device transportation particularly to emerging markets. Additionally, storage, warehousing, and inventory management all provide significant additional costs. A simple way to reduce taxation costs would be to stop classing smartphones as luxury items. This is because in today’s world they have become more of a necessity than a luxury.
A reduction in the taxes would have a great effect in reducing the prices and would make them affordable to more people. This would be particularly beneficial to the development and distribution of locally manufactured smartphones offering significant opportunities for economic growth.
Abolishing the taxation and duties placed upon smartphones below a certain value can also work to reduce the cost. This would result in citizens being able to purchase these cheap smartphones, while still boosting government revenue through airtime and data bundles, as well as income from other mobile income streams.
The government can also get involved in parts of the value chain including marketing, distribution, and retail. This would reduce the costs directly incurred by smartphone makers by reducing the number of players within the supply chain.
Another strategy would be government assisting through subsidies or donations to NGOs and other entities meaning government would be subsidizing the cost of devices for those who need them most.
Some examples of how governments can assist through subsidies or other means include:
- Argentina – Provided asset financing to 8 million citizens to switch from 2G feature phones to 4G smartphones.
- Columbia – Allocated $90 million over three years to a policy which included subsidies for low-income citizens for data and smartphones.
- Malaysia – Launched a national program to encourage youth to purchase 3G-enabled smartphones with a rebate on certain phones – reducing the cost by 40%.
- Pakistan government – used funds to give smartphones to 30,000 low-income women.
The COVID-19 pandemic provides an opportunity to develop and implement long-term solutions to the digital divide in Africa. In this regard, the first priority of government should be to ensure that all Africans are able to access digital platforms through devices like smartphones so that they can stay informed on that which is important.
Charley Lewis, an ICT expert, had this to say, “If pricing of entry-level smartphones can be kept low, and priced into pay-as-you-go plans, and with data prices poised to fall, I see no reason that there should not be an upsurge in smartphone demand. The benefits to universal access and service, and to the increased data revenues, are surely to the benefit of users and operators alike.”