Total cost of ownership of mobiles comes down further, according to Nokia

Posted on February 21, 2009 / 3 Comments

Last year, several LIRNEasia researchers were pleased to work with Nokia on explaining the reasons behind South Asia (Bangladesh, India, Pakistan and Sri Lanka) being the only countries with a TCO [total cost of ownership] below USD 5/month, when the average for almost 80 countries studied was USD 13.15. According to the latest issue of Nokia’s Expanding Horizons magazine (p. 10), the TCO has come down further, to USD 10.88. The four South Asian countries in the achievers’ box [below USD 5 TCO] have been joined by eight others, suggesting that the Budget Telecom Network Model (p. 4) that we explicated as part of our explanation is spreading.

Unfortunately only the key headlines of the 2008 TCO study have been published, leaving us curious about the identity of the 12 countries with TCOs in the sub-USD 5 range. Hopefully, this information will also be published by the time our mobile benchmark results for February 2009 are released. We too use a basket methodology, but our baskets are based on actual use in South and Southeast Asia (while Nokia uses the European minutes of use and numners of SMS) and does not include the handset component. But the two studies tallied more or less last year and we hope that they will match this time too.

3 Comments

Rahat Azim
February 23, 2009, 10:05 am
The report says ‘Twelve countries reach the monthly TCO target of less than USD 5 – up from four countries in 2007’. The graph shows data of 2007. Which 12 countries reach the monthly TCO target of less than USD 5?
Rohan Samarajiva
February 23, 2009, 11:10 am
Exactly. This is the question I ask in the post. Only Nokia can answer the question that is being asked by me and by Mr Azim.
Sanna Eskelinen
February 23, 2009, 1:30 pm
It is great to see the increasing interest towards affordability of mobile communications and Nokia’s research on consumer total cost of ownership.

As quite rightly referenced by Dr. Samarajiva, the monthly TCO for the lower-income consumer is today USD 10.88. What is more, between 2005 and 2008, the TCO decreased by 19%. That’s good news for the billions of potential new mobile subscribers in emerging markets who have hitherto found it impossible to afford modern mobile voice and data communications. As the cost continues to drop, more and more people will be able to enjoy the tremendous benefits of connectivity.

The study also revealed that in 2008, twelve countries reached a monthly TCO target of less than USD 5 – up from four countries in 2007. Across the regions, Asia Pacific performs well with many countries exhibiting low TCO. Africa and Latin America lag far behind with some of the world’s highest TCOs. The twelve high performer countries in 2008 include: Honduras, India, Bangladesh, Pakistan, Uzbekistan, Indonesia, Sri Lanka, Madagascar, China, Guinea, Mongolia and Malaysia.

The TCO 2008/9 results will be published in full in the Expanding Horizons Q2 2009 – in the mean time the Expanding Horizons News flash reports the latest and will share materials also going forward! http://expandinghorizons.nokia.com/newsflash/