Impacting price benchmarking methodology


Posted by Shazna Zuhyle on March 12, 2019  /  0 Comments

featured image courtesy cable.co.uk

Methodology matters. A lot. Often, however, once league tables are released, it seems to matter less. Pride is taken in rankings, announcements made to the world on ‘progress’ and of course social media enables such announcements to spread with only headlines or captions, without any appreciation or real understanding for what is being measured.

The previous pricing league table published by Cable (cable.co.uk) was for Fixed Broadband, where they (1) averaged prices of plans on offer, (2) did not consider taxes that can have a significant impact on the price the user pays, (3) ranked countries based on simple USD conversions of the average monthly price. We saw many flaws with this method that resulted in rankings that were not reflective of reality. We engaged with them. We reached out to Dan Howdle (consumer telecoms analyst at Cable) and we responded through the World Economic Forum blog.

It’s really heartening to see the changes they’ve made to their fixed broadband methodology used in the 2018 data collection. Although they still collect and publish average monthly prices, they include start-up costs (e.g. connection fees, costs of mandatory equipment), local taxes and publish the cheapest (what the International Telecommunication Union (ITU) method refers to as ‘entry’ level) and most expensive prices in each country. While they continue to rank based on prices in USD, the methodology advices,

“This figure is not modified by the typical income of an average household or by purchase power parity (PPP), meaning relative expense (proportionate to income/wealth) to broadband users between countries can differ to the averages presented. The numbers output when factoring PPP will often become unrecognisable to a general audience as well as to those living in each country. We invite those wishing to view the data weighted by PPP for purposes beyond straightforward dollar-to-dollar comparison to perform these calculations themselves.”

This year for the first time, Cable benchmarked mobile data prices. This time around instead of averaging and comparing prices of plans, it is the per GB price that is being compared, making a fairer comparison across countries. However, my concerns raised previously, on excluding taxes and comparing dollar for dollar persists. We will reach out to Cable with our comments, and check-in on the method used in 2019. For now, we’re happy they’ve taken our comments on board for fixed broadband. LIRNEasia has been involved with price benchmarks, both in-house and with the ITU, for over 10 years. As catalysts, we’re always encouraged to see our work improving others’ research, even in the smallest of ways.

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