In Africa access to the Internet is not the problem, you can find 3G coverage almost anywhere. The problem is affordability.

The price for prepaid data bundles from Vodacom, MTN and CellC in South Africa is shown in the figure below. As expected the larger the prepaid bundle, the bigger the price tag.

This makes sense.

The next figure shows how the marginal price of data (price per MB) drops as the bundle size increases. Simply put; spend more, get more data per Rand.

This also makes sense.

When it comes to mobile data the buying habits of the rich and the poor are very different. The rich take out phone contracts or buy large prepaid data bundles when they need them.

For the poor, living hand-to-mouth, the larger prepaid data bundles (let alone contracts) are unattainable. They are forced to buy what they can afford when they can afford it. R10 here, R25 there.

The problem with the diminishing marginal cost of data shown above is that it favours the rich. Because they can afford bigger bundles they get more “bang for their buck”. The poor on the other hand get low value for money.

The extent of this issue is highlighted with the following basic and slightly unrealistic example*.

You have two people who use 250MB mobile Internet per day, or 7.5GB per month. Person 1, living off a daily salary, has to buy the prepaid data he needs everyday. Person 2 buys his prepaid data for the month in one go. He buys a 5GB, a 2GB and a 500MB bundle on the 1st of each month.

At the end of the month Person 1 (the poor) has spent more than double on mobile data than Person 2 (the rich).

Here is a breakdown of the amounts these two people pay:

* The average price per bundle between telco is used. If the bundle size is unavailable the cost per MB of the next bigger bundle was used in the calculations.