A recent post reflected on the issues with a broadband price ranking that was seemingly issued by or, in the least, endorsed by the World Economic Forum (WEF). There were comments and debates on social media about this WEF ranking that placed Sri Lanka as the 17th least expensive for broadband in the world. Given LIRNEasia’s history and interest in ICT indicators we delved into the methodology and found it to be highly flawed. We also found out that while it was cited on the WEF website, it was not commissioned by the WEF.
I presented a critique to the WEF which was published on their blog. The gist of the argument:
Indicators are a tricky business. And, in actual fact, are all flawed to some extent. The question is on how to ensure all possible measure are taken to be as representative as possible.
The method adopted by cable.co.uk was flawed to a great degree, in my opinion. Data collection and analysis is resource intensive so it’s lamentable that all this effort was taken to produce an end result that is not fit for use.
- The method averages prices of various broadband plans: This skews the price of entry-level plans or as the research analysts of cable.co.uk say “the cost of getting online”. Let us take Sri Lanka as an example. The incumbent Sri Lanka Telecom (SLT) advertises all ADSL plans with download speeds of “up to 21 Mbps” and all fiber-based plans with download speeds of “up to 100 Mbps”. The difference in price is vast. The most basic ADSL plan is LKR 450.00 (‘Web Light’, approx. USD 2.89 without tax for 7GB / month) and the cheapest fiber-based package is LKR 1490.00 (‘Web Family Plus’, approx. USD 9.57 without tax for 90GB / month). Thus, entry-level pricing would be USD 2.89 (without taxes), but cable.co.uk reports this as USD 19.93.
- The prices used do not take account of taxes, an integral component that reflects actual costs incurred by end users.
- Dollar for dollar comparison: The cost of a commodity in one country cannot be compared to the same commodity in another, based simply on dollar for dollar. The result would be highly misleading. Hence the need for principles such as purchasing power parity (PPP). The ITU method presents the USD value of broadband prices as a percentage of GNI per capita. This simple comparison levels the playing field and, at least makes it fit for comparison on a global scale.
For more information:
The cable.co.uk method and data is available at: https://docs.google.com/spreadsheets/d/1oH5Ham4Yn8x80ma0j_Z5SnOcQyUIsbPtzmcc0fvUEeI/edit#gid=998098986
An interactive map based on country ranks is available at: https://www.cable.co.uk/media-centre/release/new-worldwide-broadband-price-league-unveiled/
Blog on WEF site: https://www.weforum.org/agenda/2017/12/these-are-the-most-and-least-expensive-countries-for-broadband/