Telecom Services and Data Pricing

With the mobile technology gaining even more subscribers and smartphones becoming common, the telecom services pricing that includes voice, SMS and data is falling. Many operators are now including bundles with generous amounts to satisfy everyone. In many European countries, it is very common to have plans with unlimited everything. 

One of the reports that ITU releases is called "Measuring Digital Development: ICT Price Trends". The latest report for 2019 was released in May this year. The press release says:

On average, prices for mobile-voice, mobile-data and fixed-broadband services are decreasing steadily around the world, and in some countries even dramatically. The reduction in price relative to income is even more dramatic, suggesting that, globally, telecommunication and information and communication technology services are becoming more affordable. However, both trends do not translate into rapidly increasing Internet penetration rates which suggests that there are other barriers to Internet use, concludes ITU in its new statistical report, Measuring Digital Development: ICT Price Trends 2019.

The latest statistics from ITU confirm that affordability may not be the only barrier to Internet uptake, and that other factors such as: 

• low level of education, 
• lack of relevant content, 
• lack of content in local languages, 
• lack of digital skills, and a 
• low-quality Internet connection may also prevent effective use. 

Key results​:

• An entry-level mobile-voice basket remains broadly affordable in most countries. In 70 countries, a low-usage mobile-voice plan was available for less than 1 per cent of gross national income (GNI) per capita, and in a further 37 countries it stood below 2 per cent. Although causality is difficult to prove, price reductions have undoubtedly helped contribute to the rapid rise in the mobile-voice penetration rate, alongside growing competition and better price monitoring and evaluation by regulators.
• The expansion of bundled services has further reduced prices, as combined data-and-voice baskets are generally less expensive than the sum of the two separate baskets in most markets.
• Prices have decreased from 2013 to 2019 relative to GNI per capita The global average price of a mobile-data basket of 1.5 GB shrank from 8.4 per cent of GNI per capita in 2013 to 3.2 per cent in 2019, at a compound annual growth rate of almost -15 per cent. When expressed in USD, the global average price of a mobile-data basket of at least 1.5 GB dropped by 7 per cent on average annually between 2013 and 2019.
• Good progress has been made towards the Broadband Commission for Sustainable Development's target of achieving affordable broadband costing 2-5 per cent of GNI per capita by 2025, but still more remains to be done. There are still nine developing countries and 31 LDCs that have yet to reach the 2 per cent target by 2025.
• Fixed-broadband packages remain generally more expensive than mobile-data packages (although data allowances are not always directly comparable). Over the past four years, the affordability of fixed broadband has not changed substantially, but advertised download speeds continue to increase.

(click on the image to enlarge)

Some of the results are quite interesting as shown in the image above. The picture on top left shows the different types of packages. The report analyses price data for five key services based on the following five baskets:

1. mobile-data-and-voice basket (i.e. voice, SMS and mobile data combined) – low consumption (70 minutes, 20 SMSs and 500 MB);
2. mobile-data-and-voice basket – high consumption (140 minutes, 70 SMSs and 1.5 GB);
3. mobile-voice (including voice and SMS);
4. mobile-data;
5. fixed-broadband.

Chart 1 shows Mobile data and voice baskets in USD for 2019. LDCs stands for Least Developed Countries

Chart 2 shows Mobile data and voice baskets in PPP$, where PPP stands for purchasing power parity. This is defined as basket of goods based comparison approach (see here)

Finally, chart 3 shows Mobile data and voice basket as a % of GNI p.c. GNI stands for gross national income. Expressing prices relative to GNI per capita (GNI p.c.), as a measure of affordability, reveals huge gaps between prices for different levels of development. In developed countries, the price of a low-consumption mobile-data-and-voice basket was equivalent to 1 per cent of GNI p.c. in 2019. In developing countries, this basket cost 7.5 per cent of GNI p.c., while in the LDCs this rose sharply to 17 per cent. For high-consumption mobile-data-and-voice baskets, the differences were even larger.

Source - Visual capitalist. Click link to see complete picture

Visual Capitalist has a nice summary of data prices for 1GB of Mobile data in different parts of the world. A striking trend worth noting is that four out of five of the most expensive countries (Malawi, Benin, Chad, Yemen & Botswana) for mobile data are in Sub-Saharan Africa (SSA).

Cable.co.uk have an interactive map here, that allows you to see prices in different parts of the world. As you would guess, the cheapest data prices in the world is in India.

Finally, eXtensia has a list of data costs in African countries from 2019 here, a lot has changed in the last year so you may have to check if the information you need is correct as of today.

Related Posts:

• The 3G4G Blog: Changes in LTE pricing strategies
• The 3G4G Blog: Mobile can help with United Nations SDGs, only if prices go down
• The 3G4G Blog - Finland: A country with only Unlimited Data Plans
• The 3G4G Blog: Mobile Voice Communications is neither Dying, nor Dead!
• Operator Watch Blog: Vodafone UK Launches 5G, Plans Disruption With Unlimited Data Plans

Changes in LTE pricing strategies

Its been a while since I blogged about pricing strategies (see old posts here, here and here). I recently enjoyed listening to Soichi Nakajima, Director of "Digital Telco and OTT" at IDATE DigiWorld when he presented a talk on LTE pricing strategy. The slides are embedded below

Supply-side strategies: from LTE to 5G - IDATE from techUK

I think the slides are self-explanatory but here is the summary worth highlighting:

How LTE plans have changed: shift in focus from data allowance to quality of service 

• Mobile data services are still largely structured by on data allowance, but high volume and unlimited plans are increasingly common. 
• Unlimited does not necessarily mean high-end: some target users with a small budget, providing a very slow connection. 
• Quality of service becoming central in structuring product lines – especially speed which my or may not be combined with data caps – as is content quality. 
• Certain applications being favoured through zero rating (traffic not deducted from the customer’s allowance). This can be a way to market unlimited plans and avoid fixed-mobile substitution. 
• Growing number of partnerships with OTT video services, rather than selling premium content plans, which are tending to wane.

The slides are available to download from techUK page here. There is also a bonus presentation on "How to address the challenges of providing connectivity on trains".

Mobile can help with United Nations SDGs, only if prices go down

I came across this interesting article in WSJ, courtesy of the Benedict Evans newsletter, which discusses how Indians are using their smartphones even more and consuming far more data than they previously did. Due to low incomes, spending money on mobile top-up is to the detriment of other sectors. To quote the article:

“There was a time when kids would come here and blow their pocket money on chips and chocolate,” said Anup Kapoor, who runs a mom-and-pop grocery shop in New Delhi. These days, “they spend every last rupee on a data recharge instead.”

United Nations have created 17 very ambitious Sustainable Development Goals (SDGs) that universally apply to all, countries will mobilize efforts to end all forms of poverty, fight inequalities and tackle climate change, while ensuring that no one is left behind.

The SDGs, also known as Global Goals, build on the success of the Millennium Development Goals (MDGs) and aim to go further to end all forms of poverty. The new Goals are unique in that they call for action by all countries, poor, rich and middle-income to promote prosperity while protecting the planet. They recognize that ending poverty must go hand-in-hand with strategies that build economic growth and addresses a range of social needs including education, health, social protection, and job opportunities, while tackling climate change and environmental protection.

I have talked about Rural connectivity on this blog and a lot more on small cells blog. In fact the heart touching end user story from Rural England was shared multiple times on different platforms. GSMA has done a good amount of work with the rural communities with their mobile for development team and have some interesting videos showing positive impacts of bringing connectivity to rural communities in Tanzania (see here and here).

While you will always hear about the challenges in bringing connectivity to these rural communities, all technological challenges can be solved. There are many highly ambitious projects using balloons, drones, creating droneways, Helikites, Satellite backhaul, drone based backhaul, mmWave backhaul, etc. The real problem to solve here are the costs (spectrum, infrastructure, etc.) and the end-user pricing.

Coming back to the first story of this post about India, when given an option about selecting mobile data or shampoo, people will probably choose mobile data. What about mobile data vs food? While there are some innovative young companies that can help bring the costs down, there is still a big hurdle to leap in terms of convincing the operators mindsets, bureaucracy, etc.

To help explain my point lets look at an excerpt from this article in Wired:

It’s the kind of problem that Vanu Bose, the founder of the small cell network provider CoverageCo, has been trying to solve with a new, ultra-energy-efficient mobile technology. Bose chose two places to pilot this tech: Vermont and Rwanda. “We picked these two locations because we knew they would be challenging in terrain and population density,” he says. “What we didn’t expect was that many of the problems were the same in Rwanda and Vermont—and in fact the rollout has been much easier in Africa.”

The good news is that things are changing. Parallel Wireless (see disclosure at the bottom) is one such company trying to simplify network deployment and at the same time bring the costs down. In a recent deployment with Ice Wireless in Canada, this was one of the benefit to the operator. To quote from MobileSyrup:

A radio access network is one of the key components in the architecture of any wireless network. RANs sit between consumer-facing devices like smartphones and computers and the core network, helping connect those devices to the larger network.  

Essentially where the likes of Nokia and Huawei ask clients to buy an expensive hardware component for their RAN needs, Parallel Wireless offers allows companies like Ice Wireless to use off-the-shelf computer and server components to emulate a RAN. The company also sells wireless base stations like the two pictured above that are smaller than the average cell tower one sees in cities and less remote parts of the country.  

Besides reducing the overall price of a network deployment, Parallel’s components present several other advantages for a company like Ice Wireless.  

For instance, small base stations make it easier for the company to build redundancies into its network, something that’s especially important when a single arctic snowstorm can knock out wireless service for thousands of people.

These kind of benefits allow operators to pass on the cost reduction thereby allowing the price reduction for end users. In case of Ice Wireless, they have already got rid of roaming charges and have started offering unlimited data plans for the communities in Canada's North.

Finally, to quote David Nabarro, Special Adviser of the United Nations Secretary-General on the 2030 Agenda for Sustainable Development from the GSMA 2016 Mobile Industry Impact Report: Sustainable Development Goals:

Achieving the SDGs demands new technologies, innovations, and data collection that can integrate and complement traditional statistics. A driving force behind this data revolution is mobile technology. 

Mobile phone technology has already transformed societies around the globe, even the poorest countries and communities. It is helping to empower women, create jobs, spur financial independence, improve education, boost agriculture production, and promote better health. Mobile phones have enabled communities to monitor elections, hold governments accountable, and save lives in natural disasters. 

As we focus on implementing the Sustainable Development Goals, the mobile industry has a critical role in working with governments and the international community to expand connectivity, to lower barriers to access, and to ensure that tools and applications are developed with vulnerable communities in mind. 

With 5G just round the corner, I hope that the operators and vendors will be able to get their costs down, resulting in lower end-user prices. That would be a win-win for everyone.

*Full Disclosure: I work for Parallel Wireless as a Senior Director, Strategic Marketing. This blog is maintained in my personal capacity and expresses my own views, not the views of my employer or anyone else. Anyone who knows me well would know this.

Is the Global Mobile Roaming model broken?

Yesterday, I noticed some heavyweights discussing roaming prices on Twitter. It is embedded below using the new Twitter embed feature:

I really don't understand why Google Maps still failsin this way twitter.com/BenedictEvans/…
— Benedict Evans (@BenedictEvans) May 18, 2013

@benedictevans it might be the Vodafone connectivity on your phone. Try O2 :)
— Carlos Domingo (@carlosdomingo) May 18, 2013

@carlosdomingo you'll have to match their roaming pricing first ;)
— Benedict Evans (@BenedictEvans) May 18, 2013

@benedictevans I am sure @ronandunneo2 will be interested in looking at it.
— Carlos Domingo (@carlosdomingo) May 18, 2013

@carlosdomingo @benedictevans ours is a fixed rate of just £1.99 a day for data and #TUGo for IP calling to anyone
— Ronan Dunne (@ronandunneo2) May 18, 2013

@ronandunneo2 @carlosdomingo not in New York, as far as I can see
— Benedict Evans (@BenedictEvans) May 18, 2013

@benedictevans @ronandunneo2 Hi Benedict, you can find our latest rates by selecting USA from the drop down list here j.mp/ML2Xzy
— O2 in the UK (@O2) May 18, 2013

@o2 @ronandunneo2 O2 in the USA: £6 per meg. Vodafone in the USA: £25 for 100 meg a day. Sorry, but that's an easy choice.
— Benedict Evans (@BenedictEvans) May 18, 2013

Those who follow me on Twitter may have noticed me ranting about the roaming prices recently so I thought that this is a perfect opportunity to put my thoughts down.

As being discussed above, I went on the websites of two UK operators and found out about their roaming rates to India and The USA and they are as follows:

 It should be noted that there is a better rate available with some kind of bundle opt-in from both the operators and I have not shown about the other UK operators but they offer a similar sort of rate so I am not trying to single out O2 and/or Vodafone.

Since LTE is 'All-IP' network my interest is more from Data point of view rather than the voice point of view. A colleague who went to India recently decided that enough is enough and he bought a SIM in India locally. Apparently is just a bit too difficult to get SIM in India if you are not an Indian resident, nevertheless he somehow managed it. The rates as shown below was INR 24 for 100 MB of data.

Rs. 24 is something like $0.50 or £0.35. You see my problem regarding the data rates? People may be quick to point out here that India has the cheapest data rates in the world. On the other hand we look at US, the rates are as follows:

Even if we assume $15 / 1GB data, its far cheaper than the roaming rate which may be something like,  £3/MB = £3000/GB or £6/MB = £6000/GB.

I blogged about all the interesting developments that have been happening in LTE World Summit regarding the roaming solutions but what is the point of having all these solutions if the operators cant work out a way to reduce these costs. Or is it that they do not want to reduce these costs as they are a good source of income?

The operators complain that the OTT services are taking business away from them and turning them into dumb data pipes but to a lot of extent its their fault. People like me who travel often dont want to spend loads of cash on data and have worked out a way around it. Most of the places I visit have WiFi, most of my work is not urgent enough and I can wait till I am in a WiFi coverage area. In some parts of the world, still I have to buy an expensive WiFi access but compared to the roaming rates, its still cheap so I have stopped complaining about it. My decision to book a hotel depends of reviews, free breakfast and free WiFi. Some of our clients who give us their phone to use abroad strictly inform us that data should not be turned on unless its a matter of life and death.

If the operators dont change their strategies and work out a better solution for the roaming rates I am afraid that their short term gains will only lead to long term pains.

Do you have an opinion? I am interested in hearing.

Ovum: Global LTE Pricing Strategies

Here is another interesting presentation from the LTE World Summit:

Steven hartley ovum-thurs_zone-2_masterclass-2_thurs from ceobroadband

Other related posts:

• Right Pricing LTE ... and Mobile Broadband in general
• Right Pricing Mobile Broadband

3GPP based 'Sponsored Data Connectivity'

One of the features being investigated and added is the Sponsored Data Connectivity feature in the Evolved Packet System. This feature has lots of backers as this is deemed to be a new source of revenue for the operators.

In Release-10 one of the items for this is titled 'Policy Enhancements for Sponsored Connectivity and Coherent Access to Policy related Databases (PEST)'

The justification for PEST is as follows:


With the emerging of innovative IP services, the transactional data usage is becoming more and more prevalent on the mobile. For example, the user downloads a purchased ebook from an online store; the user purchases and downloads a game from an operator store; the user views free trailer clip from an online library to determine whether to buy the entire movie or not. In many cases, the Sponsor (e.g., Application service provider) pays for the user’s data usage in order to allow the user to access the Application Service Provider’s services. This enables additional revenue opportunities for both the Application service providers and the operators.


In particular, such dynamic data usage provided by the Sponsor allows the operator to increase revenues from the users with limited data plans. The user may have limited data plans allowing only a nominal data volume per month and the Sponsor may dynamically sponsor additional volume for the user to allow access to the services offered by the Application service providers.


The PCC framework can be enhanced to enable such use cases, in particular, it allows the operator to provide service control based on such sponsored services. For example, it allows a dynamic IP flow to be excluded from the user’s data plan since a Sponsor might sponsor the data usage for the identified IP flows. For example, the user may use the limited data plan to browse an online store for interested books; but once a book is purchased, the data usage for downloading the book can be granted for free. In addition, the IP flow may also be granted certain level of QoS (e.g. video streaming).

TR 23.813 studied the feasibility of these scenarios of sponsored connectivity in the key issue 1 and converged into a set of extensions to the PCC procedures which will allow the operator to provide sponsored connectivity to sponsor entities.


In addition to Key Issue 1, SA2 also studied the feasibility of Key issue 2 - Coherent access to Policy related databases within TR 23.813. It enables UDR (User Data Repository) in the PCC architecture as an optional functional entity where PCC related subscriber data can be stored and retrieved by the PCRF through the Ud interface. This deployment scenario does not require SPR and allows the PCRF access to the PCC related subscriber data stored in the UDR.

In Release-12 PEST is linked to another new feature titled, 'Interworking between Mobile Operators using the Evolved Packet System and Data Application Providers (MOSAP)'

The Justification of this is as follows:

Mobile operators have to deal with increasing flexibility of data services delivery on different devices. 


The data services could be hosted by the mobile operators in their data centers within 3GPP domain or could be hosted by 3rd party data application providers that could be outside of the mobile operator domain. 


Current practices involve individual mobile operators negotiating agreements with data application providers resulting in proprietary additional functionalities in 3GPP networks which results in  non-standard 3GPP interfaces. With the advent of new models of services delivery like cloud computing and Application Stores, it is important that the mobile operator minimises upgrades to the network  and associated backend integration. 


Also the mobile operator has the opportunity to explore various charging models in this interworking scenario with data service providers. 


Sample services/capabilities that mobile operators can provide to data application providers are customised billing/charging, promotional services, group addressing capabilities, identity services, statistics, etc.


This WI proposes to enable the mobile operator to use enhanced functionalities and interfaces to meet the needs of the rapidly changing industry models. The WI is expected to develop requirements and architectural frameworks for authentication, authorization, policy, charging, mobility and session continuity aspects for various interworking scenarios.


The existing schemes for authentication/authorization and charging need to be studied and updated/enhanced, when deemed necessary, by liaising with other 3GPP Working Groups/SDOs/fora in charge of them.


This WI was de-prioritised in Rel-11. The Rel-12 work will take into consideration the new TS 23.682 developed in Rel-11 (Architecture Enhancements to facilitate communications with Packet Data Networks and Applications).

What are you your thoughts on sponsored data connectivity?

xoxoxoxoxoxo  Added on 08/07/2012 - 14.00 xoxoxoxoxoxo



I had a quick discussion with Dean Bubley on twitter and here is what he thinks:

Key question is what use cases & how the biz model / sponsor interaction works. 1-800 model is a #UselessCase for example. I think tollfree/1-800 apps is a nice idea, but totally unworkable when you drill into the practicalities. There are a few corner-cases & niche exceptions (eg govt-supplied apps) but proposed case for general apps / content is a chimera. 

More details on what Dean Bubley means is on his blog post here.

The comment at the end is very interesting, summarising the hurdles that exist in providing 'Toll-free data'.

My belief is that since the operators are running out of the options in generating new revenues, they may make a compromise and find a middle ground for making the 'Sponsored-data' to work

Right Pricing Mobile Broadband

Right Pricing Mobile Broadband ... Examining the Business Case for Mobile Broadband from Dr. Kim (Kyllesbech Larsen)

Note by Dr. Kim: Delivered this presentation at the Informa's Pricing Mobile Broadband conference 26 & 27th August 2012 in London. While some of the slides are similar to the ones in my Mind Share document you will find new slides and re-worked material giving another twist to Right Pricing Mobile Broadband. Enjoy and should you have any questions/comments just get in touch! Don't be a stranger!

You can also see the old presentation on Right Pricing LTE ... and Mobile Broadband in general here.

Right Pricing LTE ... and Mobile Broadband in general

Mind Share: Right Pricing LTE ... and Mobile Broadband in general (A Technologist's observations) from Dr. Kim (Kyllesbech Larsen)

Note by Dr. Kim: I should emphasize that this presentation really is a Technologist's view on mobile data pricing and not that of a Pricing Professional (whatever that might mean) responsible for pricing today's (maybe even tomorrows) mobile data products.