In our third instalment reviewing the 2013 edition of “Measuring the Information Society” published by the International Telecommunications Union, we focus on the affordability of mobile broadband in the Caribbean.
As part of its examination of the development of the Information Society in its publication, Measuring the Information Society, the International Telecommunications Union (ITU) reviewed mobile broadband prices and affordability worldwide. In this post, and based on the data published by the ITU on Caribbean/CARICOM countries included in the exercise, we will be highlighting the extent to which mobile broadband services are affordable across the region.
ITU’s approach and methodology
Figure 1: MIFI pocket modem (Source: Digicel Jamaica website)
As it relates to mobile broadband, the ITU considered two distinct categories of service based on the interface used. First, it focussed on Internet broadband services accessed through mobile/cellular handsets using technologies such as UMTS, HSDPA+/HSDPA and CDMA2000. Second, it examined broadband services that can be accessed through a computer-based connection, such as via USB dongle or wireless modem that connects to a mobile/cellular broadband network. In the Caribbean, examples of this computer-based service would include Digicel Jamaica’s “4G broadband“ service for which a range of modems are available, and LIME Jamaica’s MiFi device, which requires a SIM card and a post-paid mobile/cellular plan for successful use.
In order to compare mobile broadband pricing and affordability, the ITU implemented the following methodology in summary:
- Unbundled prepaid and post-paid mobile-broadband prices (including taxes) were collected from the operator with the largest market share in each country, and for residential single user plans.
- Prices for Wi-Fi or hotspot connectivity were excluded.
- For handset-based mobile broadband, prices were collected for the least expensive plan with a (minimum) data allowance of 250 MB and 500 MB for a minimum of 30 days.
- For computer-based mobile broadband, prices were collected for the least expensive plan with a (minimum) data allowance of 1GB for a minimum of 30 days.
To indicate the likely affordability of those services, the prices collected were then considered against the Gross National Income per capita (GNI p.c.) in the countries examined. The results were expressed as percentages of GNI per capita, which suggests the percentage of an average person’s income that might be consumed by a particular service, and thus points to the extent to which it might be affordable for a consumer.
Caribbean performance on handset-based mobile broadband affordability
For this exercise, only eight Caribbean/CARICOM countries were included out of 126 countries assessed: Antigua and Barbuda, Bahamas, Barbados, Dominican Republic, Haiti, Jamaica, Suriname, and Trinidad and Tobago. Figure 2 shows the countries’ performance for prepaid and post-paid pricing as a percentage of GNI per capita for a 500MB mobile/cellular broadband data plan.
Figure 2: Prepaid and post-paid mobile broadband pricing for a 500MB data plan as a percentage of GNI per capita in select Caribbean countries in 2012 (Source: ITU)
With regard to prepaid handset-based mobile broadband prices, the smallest percentages of GNI per capita were reported in Trinidad and Tobago at 1.7%, Barbados at 1.8% and Antigua and Barbuda at 2.8%. Conversely, the largest percentage of GNI per capita were reported in the Dominican Republic at 26.1 %, followed by Haiti at 16.9% and Jamaica at 4.9%.
The results for the post-paid data plans mirror those of the prepaid plans in terms of country rankings, but with slight differences in the percentage GNI per capita. The smallest percentage of GNI per capita for a 500 MB post-paid mobile/cellular broadband data plan were reported in Trinidad and Tobago at 1.7%, Barbados at 1.8% and Antigua and Barbuda at 2.5%. On the other hand, the largest percentage of GNI per capita were reported in the Dominican Republic at 26.1 %, followed by Haiti at 16.9% and Jamaica at 4.2%.
Caribbean performance on computer-based mobile broadband affordability
The Caribbean/CARICOM countries included in this exercise were the same ones included in the previous mobile/cellular broadband pricing assessment, but only 124 countries worldwide were examined. Figure 3 shows the results for both prepaid and post-paid computer-based mobile broadband prices.
Figure 3: Prepaid and post-paid mobile computer-based broadband pricing for a 1GB data plan as a percentage of GNI per capita in select Caribbean countries in 2012 (Source: ITU)
The countries with the lowest prepaid prices as a percentage of GNI per capita for mobile computer-based broadband were Trinidad and Tobago, at 1.2%; Barbados, at 1.8% and the Bahamas, at 1.9%. The highest percentages were reported by the Dominican Republic, at 106.3% of GNI per capita; followed by Haiti at 67.7% and Suriname at 6.0 of % of GNI per capita.
In relation to post-paid prices, there are a number of similarities to the prepaid prices results. Again, Trinidad and Tobago has the lowest post-paid prices as a percentage of GNI per capita, at 1.2%, and was followed by Barbados and the Bahamas at 1.8% and 1.9% respectively. However, in the Caribbean, the ITU reported that the highest post-paid prices as a percentage of GNI per capita was experienced in Haiti, at 67.7%, followed by the Dominican Republic at 47.7% and Surname at 6.0%.
Parting thoughts…
Consistent with our previous post this week, Snapshot: ITU findings on mobile broadband affordability in the Caribbean 2012, it must be highlighted that the ITU’s findings might be a bit dated since the data used was collected in 2012. Moreover, in the Caribbean, there seems to be a growing focus by the telcos and ISPs to promote mobile/cellular (handset-based) broadband. Hence, over the past several months, new pricing plans and even prepaid plans have been introduced in some countries in the region.
In a similar vein, it is interesting to note that in most of the Caribbean countries surveyed, there appears to be little difference between the prepaid and post-paid prices for both the handset and computer-based broadband services. Traditionally, prepaid services are more expensive than their post-paid counterparts because the former was generally perceived as a premium option for which more was charged. However, that posture seems to have changed.
Possible reasons for this change might be, first, the fact that Caribbean consumers overwhelmingly prefer prepaid telecoms services, and so the absence of such an option would likely be a deterrent to many to take up certain services. Second, there has been consistent criticism that mobile/cellular broadband prices in the region are still too high, hence a lowering of the prepaid price points, in particular, could result in increased take-up of the service. Third, in most Caribbean countries, mobile/cellular voice-based services are reaching saturation. Mobile/cellular subscription penetration is high, which means that at a minimum consumers are engaged in voice and text (SMS) based communication services. To varying degrees, mobile/cellular broadband is a nascent segment of the market, which telcos appear to be beginning to focus on and promote, in order to secure market share in this segment and to strengthen their overall presence and relevance in their markets.
Image credit: Sura Nualpradid / FreeDigitalPhotos.net
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The incidence of similar pricing in mobile broadband for prepaid and post paid really indicates the extent to which cost based pricing is not being maintained in the Region. because on a cost- based premise, both services could not possibly be the same. This is because of the fact that access costs were heavier in the prepaid prices cost profile, being previously absorbed in the usage minutes of the voice related services. Now with the always on broadband network transmission technology, access must be spread over a very longer time horizon and relate to different carriages cost (no circuit switching, TDM technology being superseded). Cost models would reflect these difference and show prepaid costs different to post paid. Post paid also absorbed big servicing of free usage minutes. The fact that these prices are level and level possibly at the higher end of the pricing range of the two, means costs are not being driven properly to services or, that either one of these service prices have elements of cross subsidy.
It is important that cost based pricing be elevated now in telecoms and in other all industries as this has a direct link to global resource efficiency and economically sustainable cost recovery strategies for the long term. This will help to remove uneconomic uses of natural resources as the world moves to deal with the more overarching issue of 1)deficit of natural resources(meaning they need to be utilised more efficiently and not used for excess pricing above what is intrinsic value, which in turn constitutes waste and a “sister ill”of 2) global and environmental climate problems, which too can also be traced to inefficient use and abuse of natural. resources