Selection Step 3a: Selecting an Affordable Last-Mile Connectivity Solution

Financial viability versus affordability: It is worth stressing that the financial viability of establishing service (considered from the point of view of the investor, whether the project is a commercial investment or a subsidized deployment) is different from the affordability of the service provided (considered from the point of view of individuals in the prospective underserved locality). While financial viability is dependent on revenue generation, presumably from paying consumers, it is irrelevant – in terms of financial viability – whether these customers are higher or lower income, or if they are businesses and organizations instead of users. What matters is that the revenues generated can cover the costs of deployment. Affordability, particularly broadband affordability gauged on the basis of 2 per cent of monthly GNI per capita, on the other hand, is shaped by the consumer profile. So, whereas a deployment may be financially viable from the perspective of a service provider, in that it provides connectivity to higher-income consumers (or businesses), that particular deployment would not be serving an affordability goal. The difference is depicted in the notional figure to the right, which shows that a service may be highly viable / profitable (in the eyes of a service provider), but low in affordability (for the average consumer).

Figure 34: Financial viability versus affordability