Sunday, April 5, 2020

Mobile Internet Prices in Low-Income Countries Confirms Long-Term Telecom Price Trends

Since the 1980s, connectivity product prices have fallen over time. That is true of mobile internet prices, voice and messaging, internet transit, cloud computing, mobile service, long distance calling  and fixed network internet access


The latest study by the Alliance for Affordable Internet confirms the trend. 


In 2019, low-income countries made impressive strides towards affordability. In 2019, low-income countries increased their affordability scores three times as much as middle-income countries, on average, according to the  Alliance for Affordable Internet


source: Alliance for Affordable Internet


The AAI index measures infrastructure availability and take rates, not actual prices. But the index then is correlated with prices for 1 gigabyte mobile prepaid plans. 


As always, the correlations might be different if other plans offering more usage are compared, as price-per-gigabyte tends to drop as volume rises, but absolute price might climb. That is important, as typical usage varies by country. 


In other words, if users in some countries buy plans featuring 3 GB or 10 GB, that means spending will be higher, because usage is higher. Conversely, spending will be lower when most users buy 500 MB to 1GB. 


Posted rates are one thing; actual buying behavior and usage can be quite different. But prices are dropping, everywhere. 


source: Alliance for Affordable Internet


The report also confirms what you would expect, that competition also increases affordability. 


Still, low-income countries saw a 15.6 percent increase in their affordability scores from 2018 to 2019, as well, compared to 4.5 percent and 5.1 per for lower-middle and upper-middle-income countries, the Alliance reports.


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