Affordability is Biggest Barrier to Mobile Internet Adoption in Ethiopia: Report

Affordability remains the biggest barrier to mobile internet adoption in Ethiopia, according to the latest report by the Global System for Mobile Communication Association (GSMA). Despite a marked drop in basic data prices by both telecom operators in the country over the past few years, consumer surveys showed a year-on-year increase in the percentage of people who cite affordability as the most significant barrier.

The report unveiled in a high-profile ceremony attended by CEO’s of both telecom operators at the Hyatt Regency Hotel on Thursday provides insights into the drivers and barriers of digital transformation in the country.

John Giusti, Chief Regulatory Officer at GSMA, underscored the need to address cost barriers to address the hurdles of affordability during his opening remarks. He pointed to possible interventions via tax breaks, reduced duties, and incentives as worthy routes of exploration.

Ethiopia imposes a 10% duty on the import of smartphones, a 15% value-added tax (VAT) on airtime, data, and international calls, as well as annual spectrum fees. Compounded, these costs present a significant affordability barrier for a country where 86 million people live in poverty.

Despite progress in recent years, Ethiopia’s 4G internet coverage is nearly at 40% of the population, while 3G coverage has reached 40 million users. Tax cuts and benefits for telecom infrastructure development, digital finance, and a review of the excise tax are recommended by the report.