Saturday, November 22, 2014

LTE: A Race Nobody "Wins"

Some might argue it is a waste of much time to argue about which region or nation is "ahead" or "behind" on some measure of communications usage, performance or investment. The reason is that the metrics always change, and that there are multiple relevant metrics.

There is, in other words, no sustainable advantage. 

One often hears it said that "the United States is behind Europe on high speed access speeds and prices." It depends on whether one compares the plans people actually buy, for example, no matter what existing plans are offered. 

It does not matter what the typical lowest, median or most-expensive plans actually are, if most people do not buy stand-alone high speed access plans, as is the case in the U.S. market, where most buy triple-play packages. 

Among the other issues are variations in national prices for all products and services. On a percent of monthly income, or yearly income basis, U.S. high speed access costs as little, or less, than similar plans in Europe or elsewhere. 

There are anomalies: EU consumers pay less per month than U.S. consumers for mobile wireless services, but U.S. consumers use five times more voiceminutes and twice as much data, according to the GSMA.

So it matters whether one measures price only, or price-per-bit, or price-per-call, which related price to quantity. In the area of voice calls, U.S. consumers pay 333 percent less per minute of use than do EC customers.

But measured as percentage of household income, U.S. prices actually are lower than in Europe, even though the conventional wisdom and studies tend to suggest the opposite is true.

When converting for purchasing power parity, posted retail prices in the United States rank about 43rd globally, in terms of cost, behind Columbia and ahead of Greece. Keep in mind that tells you something relevant only if most people actually buy particular plans, whether they are low-cost or high-cost plans.

Cost as a percentage of household income runs less than two percent in developed nations, as a rule. So the actual cost for U.S. or EC consumers is about the same. 

Also, which index one chooses also makes a huge difference. Measuring performance, price or availability and adoption of Long Term Evolution, for example, results in different "leaders" than measuring fixed network performance, price and availability. 

source: Wall Street Journal

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