Beyond cheap coverage

Posted on December 11, 2006  /  1 Comments

Nov 13, 2006
By Tony Chan, Wireless Asia

This article raises the important question of affordability of access to services on mobile networks versus services on fixed networks (e.g HSDPA versus broadband). Some pertinent questions raised include:

Does coverage mean cheaper access to telecommunication services? While it very well might be cheaper for governments to provide mobile coverage to rural areas, are the ongoing costs of access cheaper as well?

Although the author doubts whether users in rural areas of emerging Asia can afford even the cheapest mobile packages ($5/month) that we are paying today in Hong Kong, the 2005 Shoestring research proved otherwise, with 34 % spending USD4-8 on mobile services, and 30 % pendingmore than USD8 per month –significant proportions of their monthly household incomes (below USD100). Similarly, the 2006 Shoestrings research is revealing high expenditure numbers at the bottom of the pyramid.

1 Comment

  1. It’s a very confused and self-centered article.

    The GSM Association report that re refers to was presented at the session that I chaired at ITU Telecom World. GSMA’s argument is relatively simple: why take money from mobiles and (a) not spend it, and (b) give it to inefficient fixed operators?

    Mr Chan converts that into a complaint about the costs of his mobile subscription in Hong Kong. He should be reminded about one of the basic facts of economics: price is set by the interaction of supply and demand, not by cost. If he wants lower prices in HK, he should encourage OFTA to allow more entry, not burden readers with unconnected whining.