Affordability of ICT in South Asia improves according to ITU’s Price Basket methodology

Posted on November 27, 2014  /  1 Comments

Related to the previous post on ICT Development Index,  the 2014 Measuring the Information Society report also has a section on the ICT Price Basket (IPB) which is a composite basket that includes three sub-baskets: fixed-telephone, mobile cellular and fixed- broadband. This is used to measure the affordability of ICT in a country by dividing the IPB value by the Gross National Income (GNI) per capita of the country. Even though the report mentions that the growth of mobile broadband has overtaken fixed-broadband and is less expensive especially in developing countries, the IPB still does not include mobile-broadband. ITU has a separate section only measuring the affordability of mobile broadband, but has not included these indicators into their index.

While South Asia performed badly in the IDI, the affordability of ICT in South Asia is much better according to ITU’s ICT Price Basket method with Sri Lanka ranked 39 (up from 44), Bhutan 71 (up from 81), India 84 (up from 92), followed by Bangladesh, Pakistan and Nepal at 102, 116 and 119 which have not moved much compared to 2013. We believe the index would be more accurate and the South Asian performance would improve further if the IPB included mobile broadband sub-basket into the index.

Looking at the sub indices of the IDI, one of the reasons for South Asia to perform badly maybe due to the emphasis ITU places on fixed connectivity. There are three sub indices fixed telephone penetration, household computer penetration and fixed broadband subscriptions (which account for almost 30% of the total IDI score) even though most industry players believe that the future of ICT is mobile.

LIRNEasia has been providing expertise on related indicators (price and quality benchmarks) through the Expert Group for Telecom Indicators (EGTI). We raised the question on relevance of including some indicators such as narrowband subscriptions, localities with access to a public telephone service (less relevant on a global scale considering the high and rising number of mobile subscriptions) and on revising the defined speed of broadband services that still remain at 256 Kbps. While the former two have been addressed (i.e. removed from the indicators’ questionnaire), the latter is yet to be deliberated. At the face-to-face meeting held in Geneva 17-18 September 2014 that LIRNEasia was not present at, decisions were made to include new indicators. These include indicators on (1) International Internet Bandwidth for (i) Lit and (ii) Used bandwidth; and (2) Bundled services such as (i) fixed-voice and fixed-broadband, (ii) fixed-voice and fixed-broadband and pay TV and (iii) mobile-voice and mobile-broadband. Bundled services have been defined as:

  • A commercial offer that includes two or more of the following services: fixed telephone, mobile voice, fixed broadband, mobile broadband, pay TV;
  • marketed as a single offer, with a single invoice and with a single price for the set of services included in the bundle;
  • subscribed under conditions that cannot be obtained by adding single play offers together

So for example, mobile broadband plans (for use via a handset) that operate on a pay-per-use basis for data services will not be counted as a bundled service, but those who have subscribed to additional data plans will be. The inclusion of bundled service as separate indicators is going to add to the complexity and will pose data integrity issues for the basic “subscriptions and subscriptions per 100” indicators.

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