Pardon me, Mr. Musk, $1 is way too much money.
(Whenever this article refers to a dollar, the currency in question is the US dollar. When it refers to a shilling, the currency being referred to is the Kenyan shilling.)
In October 2023, X (née Twitter) launched a programme named Not a Bot in the Philippines and New Zealand. This programme - really, a subscription - will charge new users in these countries an annual fee of $1 in order to use key X features. This, mind you, is separate from the regular X Premium subscription, which costs $3, $8 or $16 per month.
During an all-hands at X held last week, it was indicated that this programme will “expand at the right time” beyond these two countries. It is at this point that Elon Musk said the following:
Sometimes, I get this absurd thing where it’s like, “How will people in poor parts of the world afford?” I’m like, “They are somehow on the internet. They have an electronic device, and they are on the internet, and a dollar a year is 0.3 cents a day.” This is affordable for anyone, obviously.
Now, while I’m not the owner of a company valued at billions of dollars, I do have the benefit of living in one of these “poor parts of the world.” And I can tell you that $1 is too much money for a large percentage of the population. Here’s why.
As of the 3rd of November, the exchange rate at the Central Bank of Kenya was 151 shillings. At other banks, this figure was between 157 and 160 shillings. That, by the way, is about 1% of the minimum wage earned by labourers in Nairobi. In other parts of the country, that rises to about 2% of the minimum wage. Obviously, this isn’t an apples-to-apples comparison since one rate is monthly while the other is annual. So let’s even the playing field a little bit.
Before doing so, as a quick tangent, let’s look at how some companies are able to grow (and maintain) their user base in some of these countries. While you’re absolutely right in stating that people in poor parts of the world are on the internet, it’s likely a very different experience from what you might be used to. A typical user is likely to buy a data bundle that, in addition to a data allotment, includes some sort of freebie, be it free Facebook browsing, free or subsidised access to YouTube, free or subsidised access to TikTok, or free access to WhatsApp.
Going back to the matter at haad, taking 160 shillings as the conversion rate, one dollar works out to approximately 50 cents a day; more accurately, it’s 44 cents. That definitely makes it a lot more palatable. But factoring in potential transaction fees, would it really be worth the hassle of charging a user 50 cents a day?
And even if you did find a way to come up with a daily subsription plan working by partnering with mobile carriers, are you sure you’d want to trust a citizenry that defaulted on approximately $519 million (83 billion shillings) in loans within a period of four months?