TCO Archives — LIRNEasia

The long dragged-out drama of license renewal in Bangladesh has taken one step toward closure, according to the Daily Star. The government yesterday finalised the process of how it will charge four mobile operators — Grameen-phone, Banglalink, Robi and Citycell — for renewing their licences for the next 15 years. A high-profile meeting presided over by Prime Minister Sheikh Hasina decided that the operators will pay at the rate of Tk 150 crore for per megahertz of airwave, which will be multiplied by the total allocated spectrum and a ‘market competition factor’. The meeting held at the Prime Minister’s Office also decided to give 3G (third generation) technology licences through auction. The per-MHz amount has been set arbitrarily.
According to the Nokia Total Cost of Ownership (TCO) study 2011, Ethiopia’s mobile prices bring it to the very threshold of membership in the “Under USD 5 club” of 11 countries. The TCO in Ethiopia in 2010 was USD 5.02. This is a puzzle and appeared to pose a challenge to the entire explanation of the conditions for the emergence of the BTN business model. Because Ethiopia is a member of another exalted “club,” the “bottom-ten” in terms of mobile connectivity.
TCO 2011 study update_wallet share Every year Nokia conducts the telecom equivalent of the Economist’s “Big Mac” study; it compares the total costs of using an identical basket of services over a mobile phone in multiple emerging economies. It used to cover 77 countries, but now they’ve pared it down to 50 major emerging economies. If only the voice and SMS services are counted (plus 1/36th of the cost of the cheapest Nokia phone in that market), Bangladesh is the winner. A Bangladeshi user will pay only USD 1.91/month as against the average of USD 11.
Helani Galpaya, COO of LIRNEasia,  was invited by the Strategic Affairs Directorate to speak at a  seminar on Alternatives for Infrastructure Development and Broadband Access.   Brazil is embarking on an ambitious program to increase broadband penetration, and is currently discussing various options – one of the more interesting being the provision of a government-owned backbone, using the dark fibre that is currently owned by the electricity and petroleum companies.  The pros and cons of this, and other options were discussed at the seminar, and a the full day of closed-door discussions that followed between the speakers and the Strategic Affairs Directorate staff.   Helani focused on the importance of thinking about the market structure (whether or not there was sufficient competition at all points in the network) and demand stimulation.  For example, Nokia’s TCO study shows that Brazil has the highest cost for mobile users among all the countries studied (possibly driven by highly asymmetric interconnection rates and lack of sufficient competition, among other things).