The unending increase in the price of goods and services across Africa has just welcomed another unfavourable addition. Google LCC, the provider of Google One, in an email to users on February 26, announced that the price of its cloud storage subscription services would be going up.
Many countries, including Nigeria, Ghana, Egypt, and the Republic of Tanzania, were affected by this increase, which will take effect from March 28, 2025, for current subscribers and immediately for new subscribers.
This price increase is the latest in a range of increases in Google One prices on the continent. In 2023, Google hiked the Google One subscription price in Kenya, South Africa, and Nigeria. Cloud storage in South Africa increased by as much as 35.87%, with the basic plan moving from R29 to R34.99. In Kenya, the subscription price was increased by a minimum of 25%.
Kenyan users also experienced an increase in their annual subscription plans by at least 19% in 2024.
While Kenya and South Africa are not affected by the latest price hikes, it is unlikely that any African country will be spared during the global price hikes in goods and services.
Global service providers' need to increase prices is not limited to Google; African countries have seen some intense price increases in the past two years.
Service providers like Netflix and Starlink have recently adjusted the cost of their services in Nigeria, citing a need to enhance their value and provide better services.
In July 2024, Netflix increased the subscription cost of its streaming service a second time by up to 40%, hiking the premium plan from ₦5,000 to ₦7,000.
In a similar fashion, Starlink imposed a price increase in Nigeria to take effect from January 2025. The Internet provider doubled its monthly subscription plan from ₦38,000 to ₦75,000, and the cost of its hardware router jumped from ₦440,000 to ₦590,000.
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However, while Starlink’s monthly subscription prices in Nigeria cost more than the average citizen can afford, it is interesting to note that in some other African countries, including Kenya, Ghana, Zimbabwe, Mozambique, and Cape Verde, Starlink’s monthly subscription is cheaper than the average price of Internet service provided by the leading ISP. For instance, in Kenya, users have more affordable options not available to Nigerians, like renting the Starlink hardware or opting for a lower-cost 50GB plan.
Microsoft has not been left out of the price hike race. The software provider increased prices for its Microsoft 365 personal plans for users in Nigeria by 85.1% between September 2023 and July 2024.
Also, in January 2025, Microsoft announced another price increase for its global personal and family plans. This translated to a 45.9% increase for South African users.
Africans are not the only ones being hit with these hikes. In January, Microsoft increased the cost of its M365 suite in six Asia-Pacific countries, including Australia, New Zealand, and Malaysia.
Can Africans keep up?
Global service and software providers' price increases come as inflation and fluctuating currency valuations ravage the economies of many African countries.
While it is understandable that the need to maintain profit margins leaves these companies with no option but to increase prices, these conditions continue to put Africans in a difficult position.
As food and transportation prices begin to compete with the cost of cloud storage and Internet service, for average Africans, something has to give.
A South African user on X (formerly Twitter) recently commented, "There's nothing special about Starlink if you live in South Africa. It's just overpriced Wi-Fi with a crazy expensive installation cost. The local alternatives are far cheaper and better."
Africans may have to turn to more local options that offer the same services as these global giants. Local companies do not face the same problems as their international counterparts when offering services to Africans.
For example, while a Nigerian company serving Nigerian customers may be affected by inflation, it does not have to worry about the effects of currency devaluations on pricing.
This also gives Africans an opportunity to create products that bridge these gaps. As global services become increasingly expensive, more Africans will be on the lookout for alternatives, similar to how local banking solutions saw an opportunity after Mercury withdrew from serving African startups.
Interestingly, several Nigerian alternatives have sprung up in response to the cost increase from cloud services like AWS and Google Cloud. Startups like Nebula, Nobus, Galaxy, Suburban, and Layer3 offer similar services as AWS, Microsoft Azure and, Google Cloud and are attracting customers by allowing them to pay in naira.
However, the question remains whether they can become a preferred option to their global counterparts.
Exploring local alternatives
As global services increase the cost of their platforms, African companies could begin rolling out alternative solutions for the continent.
African-made streaming services like Showmax are already making headway in the market, overtaking Netflix in subscriber count. Compared to Netflix's 1.8 million subscribers in Africa, Showmax has a subscriber count of 2.1 million.
However, while local alternatives are a viable option, the reaction of African users to these price increases makes the possibility of their widespread adoption less likely.
In most cases, there is an immediate outrage over the high cost of global software or services. This is often followed by either an almost immediate adjustment to the new price, seeking avenues to circumvent the costs, or moving to low-cost alternatives.
Despite the price of acquiring and using Starlink in Nigeria, for instance, it remains the second largest ISP in the country, surpassing local service providers like FibreOne.
Following the Starlink price increase in 2024, many Nigerians took to X (formerly Twitter) to lament. However, while many users expressed displeasure, a good number said Starlink would still be their preferred choice.
One user in particular commented, "Funny enough, I just got mine yesterday and still believe the price is worth it for me. I use MTN, Glo, and Airtel that hardly stream on YouTube without experiencing disruption. So for me the Starlink is still worth it."
Another X user said, "It cost me ₦7K MTN data to watch Blood Legacy on Netflix. I will buy the Starlink nevertheless."
These prove that a local alternative is not simply the solution; rather, those that offer comparable services with their global counterparts may make headway in the African market.
In a conversation with Rest of World, Ugochukwu Okoro, Founder and CEO of Muster, said that while the company had migrated from AWS to a local cloud provider, the quality of the service was not the same.
"Their services are great, but I understand a lot of users might not want to use them because of skill issues.
"Nigerian cloud providers, however, need to improve their infrastructure and build better interfaces to compete with global giants in the long run."
However, if global services become unaffordable to Africans and local alternatives are not created to fill those gaps, Africans risk being excluded from high-quality tools that impact their work, education, and productivity.
