LIVE FROM GSMA MOBILE 360 SERIES – AFRICA: The heads of two major operator groups believe that device affordability remains a significant barrier when it comes to driving mobile internet services in emerging markets.

Sifiso Dabengwa, CEO of African operator MTN, first raised the issue, noting that for basic voice services, “it was only when the device prices went below the equivalent of around $15 that we really got exponential growth”.

“The lowest price at this moment at retail is the equivalent of about $30, and that is still a bit too high for most of our markets. We believe that once the retail price for a basic internet-enabled device gets below the $20 mark, then we will be in a much better position to see accelerated growth,” he said.

Ahmad Julfar, CEO of Etisalat Group, also touched on the topic, noting that operators in emerging markets do not have the same tools at their disposal as their counterparts in more developed regions when it comes to lowering the barrier to entry through subsidies.

“In Asia and Africa, we find it very difficult with these purely prepaid markets. It is difficult to subsidise devices; we’ve tried it in different markets, but it didn’t work very well,” he commented.

But MTN’s Dabengwa also noted that there are factors other than the device cost itself which impacts pricing. “There are not too many countries today which, for example, allow devices to be imported without duties, so that’s an additional cost,” he noted.