Composition and evolution of ICT price baskets in Africa. ITU Indicator Workshop Addis Ababa October 2015
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1 Composition and evolution of ICT price baskets in Africa ITU Indicator Workshop Addis Ababa October
2 Intro Evolution: From baskets to bundles Pricing in the African context is unique How do we capture data in a dynamic market? Enter: RAMP - RIA Africa Mobile Pricing Index 46 African countries Updated quarterly 2
3 RAMP - RIA Africa Mobile Pricing Index 1. Africa Prepaid Pricing Index 1. Baskets - Origin 2. Changes 2. Bundled Value Index 1. Market Evolution 3. Postpaid Value Index 4. Mobile Broadband (Data) Value Index 3
4 1 - Africa Prepaid Pricing Index 4
5 OECD (2010) Mobile Basket Methodology 40 calls/60 SMS prepaid monthly Pricing products for baskets of minutes and SMS At least two largest mobile operators based on subscribers numbers The operators covered should have between them at least 50% market share Cheapest products for country comparison 5
6 Basket Methodology Weaknesses Baskets do not reflect the most popular package but the cheapest product The same basket is used for all operators: offnet/on-net ratio depends on market share Only the two largest mobile operators - new entrants and small operators are likely to be price challengers 6
7 Expanding OECD Methodology to all operators and all products in a country Comparing Countries OECD Basket Methodology Comparing Operators Comparing Products 7
8 Comparing countries Comparing cheapest product available from dominant operators cheapest operator most expensive operator Comparing the difference between cheapest in country - cheapest from dominant operators cheapest in country - cheapest from most expensive operator Benchmarking 8
9 Cheapest Prepaid product in country in US$ Q Dominant operator Egypt 2.57 Egypt Ghana Sudan Ethiopia Mauritius Kenya Rwanda Tunisia Algeria Libya South Africa Nigeria Uganda Sierra Leone Namibia Mozambique Botswana Benin Ghana Sudan Ethiopia Mauritius Kenya Rwanda Tunisia Algeria Libya South Africa Nigeria Uganda Sierra Leone Namibia Mozambique Botswana Cheapest operator Benin
10 Alternative comparisons Cheapest dominant operator in Africa in USD Cheapest dominant operator in South Africa in USD SA Dominant Operator Rank Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Prices have remained the same in local currency for cheapest dominant Africa (Safaricom Kenya) and South Africa (MTN)
11 African Prepaid Pricing Index SA operators rank lowly on the index when compared to other african markets Algeria and have introduced new cheaper products pushing down S.A s rank
12 Prepaid Pricing Methodology 12
13 13
14 The Bundled Value Index (BVI) 14
15 New bundle offerings Need for additional data (ARPU/MoU) to create new baskets 15
16 Bundle Value Index BVI looks at bundles that include voice or sms and data
17 Bundled Value Index Products increase in Q New pricing strategy for all operators in country except for SA, Kenya and Ghana Airtel Tanzania best performing in Q toppled by Orange Kenya Q South African products closer to bottom of the rank Ethiopia ranks quite low in terms of value compared to other operators (Q2 2015)
18 Airtel Tanzania Sudani ZanTel MTC Tigo Ghana Airtel Madagascar Airtel Kenya Telma Airtel Uganda Vodacom Tanzania Orange Senegal MTN South Africa Orange Madagascar Tigo Tanzania Orange Africell Uganda Movicel Cell C MTN Uganda EthioTelecom TN Mobile Q BVI best operator Orange Kenya CV Movel Unitel (ex T-Mais Cape Verde) Yu Kenya Airtel Ghana Zanzibar Telecom Limited Smart Uganda Airtel Tanzania Tigo Tanzania Sudani Uganda Telecom MTC Smart Tanzania Vodafone Ghana Tigo Ghana Tigo Senegal Etisalat Egypt Inwi Airtel Madagascar Orange Senegal Airtel Kenya Vodacom Tanzania Telma Movitel Mozambique Airtel Uganda Orange Madagascar MTN Cameroon Vodafone Egypt MTN South Africa Orange Africell Uganda Movicel Mobilis Cell C Orange Cameroon Tigo MTN Uganda Orange Botswana MTN Nigeria Libertis (Gabon Telecom) Ethio Telco TN Mobile Q BVI best operator 259.7
19 RIA s Mobile Broadband Pricing Index 19
20 Prepaid Broadband Baskets Prepaid mobile broadband data bundles 1GB baskets 1MB baskets - outdated 1 Day baskets, 1 week - uncapped data bundles valid for at least 8 hours of one day - converted to one month 20
21 Prepaid data market - Q Increased countries we collect in Q from 21 to 36 african countries Rwanda s Tigo cheapest dominant operator 1GB price at USD4.39 Tanzania Zantel cheapest operator 1GB price Swaziland most expensive product offering on the 1GB price assessment Ethio Telecom is relatively cheap in terms of data in Q2 2015
22 Cheapest 1GB price USD Dominant operator in country 1GB price USD Cheapest operator in country Rwanda Mozambique Tunisia Tanzania Madagascar Niger Senegal Burkina Faso Kenya Ghana Sao Tome and Principe Ethiopia Benin Algeria Malawi Uganda Liberia South Africa Mali Mali Namibia Nigeria Togo Chad Cote d'ivoire Zambia Cameroon Gabon Sierra Leone Sudan Angola Lesotho Bostwana Zimbabwe Swaziland 37.7 Tanzania Kenya Rwanda Mozambique Ghana Tunesia Sudan Mauritius Malawi South Africa Niger Togo Senegal Burkina Faso Nigeria Sao Tome and Principe Uganda Ethiopia Benin Algeria Liberia Mali Mali Namibia Cameroon Madagascar Lesotho Zambia Gabon Chad Cote d'ivoire Angola Sierra Leone Bostwana Zimbabwe Swaziland 37.7
23 Value for Money Index - Discontinued 23
24 Download/Upload speed kbps Average Combined kbps Average Download kbps Average Upload kbps Safaricom Telecom Namibia Mobile Vodacom South Africa MTC Smile Nigeria Smile Tanzania MTN Uganda Vodacom Mozambique MTN Nigeria CellC Smile Uganda Airtel Ghana Orange Kenya MTN South Africa Vodafone Ghana Tigo Rwanda Orange Uganda Mascom Airrtel Rwanda MTN Rwanda Vodacom Tanzania Orange Botswana Airtel Uganda Airtel Nigeria Glo Mobile Ghana Source:
25 Q Value for money index Combined average speed in kbps/1gb price in USD Safaricom Kenya Vodacom SA Smile Nigeria Smile Tanzania TN Mobile Namibia MTN Uganda Cell C SA Orange Kenya MTN Namibia acom Mozambique Smile Uganda Airtel Ghana Vodafone Ghana MTN Nigeria MTN SA Orange Uganda Vodacom Tanzania MTN Rwanda Airtel Rwanda Tigo Rwanda Mascom Botswana Airtel Uganda Airtel Nigeria Glo Mobile Ghana Orange Botswana 25
26 Postpaid Value Index (PVI) 26
27 The Postpaid Value Index Postpaid makes up a fairly small share of the mobile market in Africa The index only takes into account the top 12 economies with the highest share of postpaid Benchmarking within country (between operators) is just as important as benchmarking between countries 27
28 The Postpaid Value Index 28
29 Applied Example: South Africa 29
30 What do we do with all this information? Policy example 30
31 South Africa - Decline in MTR s Cost of cheapest prepaid mobile product for OECD 40 calls/60 SMSs basket by operators in ZAR Telkom Mobile Cell C MTN South Africa Virgin Mobile Vodacom South Africa Amendment MTR 20c, asymmetry 44c MTR 40c 0 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q
32 Summary Aim is to protect the interest of the consumer For data to inform policy Collection is the easy part - All states should be doing this Data has to be carefully analyzed and understood in context of financial information and other supply and demand side indicator Continuously evolving market - indicators must evolve to keep up 32
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