Sri Lanka: What people spend on telecom, in relation to total communication and recreation expenditures

Posted on October 30, 2011  /  0 Comments

The 2009-10 Household Income and Expenditure Survey (HIES) is a representative sample survey based on responses from 22,000 households from all across Sri Lanka, except Kilinochchi, Mullaitivu and Mannar districts that were considered too dangerous because of uncleared mines. It is a veritable treasure trove of data on how Sri Lankans live, what the differences among the provinces are, and, when combined with data from past HIES, a source of trend data.

It reports communication and recreation expenditures separately, but I decided to combine them since communication is recreation.

When the different telecom related expenditures are combined, they amount to LKR 750 per month (around USD 7) and dwarf everything else. Households spend 17 times more money on telecom and Internet services than on books, newspapers and magazines. Of the total spent on communication and recreation, 65 percent goes to telecom and Internet services. Excursions and pilgrimages come second (LKR 226 or around USD 2 per month.

The post is pretty much dead. Compared to the monthly expenditure on telecom and Internet of LKR 750, only LKR 4 is spent on postal services per month by a household.

The mean monthly expenditure of a Sri Lankan household is LKR 31,331 (roughly USD 300). So the total spent on telecom is 2.4 percent, about where the literature says it should be.

The Department of Census & Statistics reports telecom and Internet service expenditure under four categories.

The big items are telephone charges (taken outside) at LKR 382.72 a month and telephone charges (land phone/mobile) LKR 345.36. The smaller components are email/Internet charges at LKR 12.78 and telephone charges (email/Internet) at LKR 8.98.

How is it that telephone charges (taken outside) are higher than for telephone charges ostensibly in the house? All evidence points to declining use of public phones in Sri Lanka. The explanation appears to be that respondents are reporting expenditure on prepaid value for mobiles in the “outside” category. I would not be able to separate out the ISP charges and what I pay for broadband, so the third and fourth categories do not make much sense to me and appear to be artifacts of the questionnaire being prepared in the dial-up days.

Anyway, that is my explanation of the components of telecom expenditures. Alternative explanations are welcome.

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