6. Regional differences: Africa, Asia, Europe, USA

Comparisons of internet costs between Asia, Europe and the USA, allow us to identify the key differences between regions in terms of internet costs:

• The cost of internet access is much lower in developed countries than in developing countries. For example, the total cost of internet access in Singapore (US$10.56 per month) is much lower than the cost in Kiribati (US$143.73). this is due to lower prices for leased lines, less need for international transit, local peering, etc in developed countries.
  
  
• In Singapore, internet access is equivalent to 0.5% of monthly GDP per capita. By contrast, in Kiribati, a group of 33 coral atolls in the Pacific Ocean, internet access costs 3.38 times the average monthly income. In relative terms therefore, it is much more expensive for someone living in a developing country to access the internet than in a developed country. If people were prepared to spend as much as, say, 5% of their monthly income on internet access, then it would be affordable only in 11 out of 35 countries in the Asia Pacific region).
  
  
• Because of the need for direct international internet connections between Tier 3 ISPs in developing countries and internet backbone providers, wealth flows from the developed periphery to the developed core.
  
  
• The affordability of Internet access has a direct correlation with the level of Internet penetration¹. The table shows that the countries with the lowest cost Internet access generally have the highest penetration. In Australia, where 37% of people are Internet users, the cost of Internet access is 1.1% of monthly income. In Papua New Guinea where 0.98% of the population are Internet users, Internet access costs 8 times the average monthly income.
  
• Obviously where there are disparities of wealth within countries, the less well-off are less likely to use the internet. The digital divide then finds expression along other economic (rural/urban) and social (age, gender) axes.
  
• In addition to wealth, the digital divide is caused by three factors: local call rates and leased lines rates are kept (artificially) high in unliberalised markets; the structure of the internet which forces ISPs in developing countries to connect to the internet backbone through international links, and; the cost of international bandwidth.

Source: ITU, “Asia Pacific Telecommunication Indicators”, 2002.

Wealth is probably the most important feature of regional differences. In a league table, the Americas and Europe would appear at the top, followed by Asia, with Africa at the bottom of the league. Obviously there are wide disparities of wealth within regions, and these can be identified by looking at 60 selected countries in Table 2 below. However, there are a number of other factors that affect internet take-up.
These include:

• The degree to which markets are liberalised. For example, Ethiopia’s low level of internet users can in part be explained by the fact that its telecom and internet delivery is entirely state-controlled.

• The slow rate of roll-out in particular countries faced with particular geographical challenges: for example the GDP per capita in Haiti and Nigeria is similar but the rate of internet penetration in the former is 0.36% as against 0.09% in Nigeria. Haiti is a relatively small island whereas Nigeria is a big country.

• Even in countries with policies designed to promote internet use, the outcomes can be very different. In South Korea there is 52.1% internet penetration (comparable to US and European levels) whereas in Singapore it is only 36.3%, even though the latter has a higher GDP per capita. The difference may partly be explained by differences in political culture.

Table 2. Wealth and Internet users 2001 (60 selected countries), sorted by region and ranked by Internet penetration.