Client Logo Colombo 08 August 2008 GSM-ASIA PACIFIC CONFERENCE Evidence for Policy Making: Some...

Client Logo

Colombo08 August 2008

GSM-ASIA PACIFIC CONFERENCE

Evidence for Policy Making:

Some Data: on International Calling, Roaming, mobile prices, international calling @BOP

Helani Galpaya - [email protected]

2

Look at some data for:

International Calling (IDD)

International Roaming

Mobile Prices

Performance of Pakistan’s Mobile sector

What we know about the BOP

Broadband Prices

3

International Calling

From the SAARC Region

4

The best rates not necessarily for calling the neighbors..

Pakistan: Cheapest rate = USD 0.03 (to US, China,

France..etc)But Cheapest rate to SAARC country = : USD 0.12

(to BD)4x more expensive

Pakistan: Cheapest rate = USD 0.03 (to US, China,

France..etc)But Cheapest rate to SAARC country = : USD 0.12

(to BD)4x more expensive

5

International Roaming

6

Can be priced for different “activities” while roaming..

Make a call to a local number (a number in the home country)

Receiving a call

Call home

Receive SMS

Send SMS

Call another international number

Use Data services (GPRS, HSPA etc)

7

Making a Local Call while roaming varies from USD 0.16 – 4.95

8

Making a local call while roaming in S Asia is unpredictable. Cheap in SE & E Asia. Expensive from Pacific Islands/AU/NZ expensive.

Classification of Local Calling by roaming country

HighLow

High

Level of Discrimination in

price offered (standard deviation)

Average Price Paid by Roaming Customer

Afghanistan, Bangladesh, Bhutan, India, Nepal

Maldives, Sri Lanka

Pakistan

Cambodia, LaosBrunei

Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam

Myanmar

French Polynesia, Guam, Palau, Papua New Guinea, Reunion, Tonga

Australia, Cook Islands, Fiji, New Zealand

New Caledonia, Samoa, Vanuatu

Mongolia

China, Hong Kong SAR, Japan, Taiwan

Korea, Macau

9

Receiving a call while roaming: Distance Charge Only – USD 5.84

10

Receiving a call: S Asian operators charge different prices based on the customer’s home country. They also charge higher prices.

Classification of Incoming Call by roaming country

HighLow

High




Bangladesh, India, Maldives, Nepal

Pakistan

Afghanistan

Tonga

Cambodia, Laos, VietnamBrunei

Indonesia, Malaysia, Philippines, Singapore, Thailand

Fiji, French Polynesia, Macau, Palau, Papua New Reunion

Australia, Cook Island, Guam, New Zealand, New Caledonia, Vanuatu

Macau, Mongolia

Hong Kong SAR, Taiwan

Korea

China

11

Calling Home can be expensive: USD 0.32 – 11.16. MV roaming in AU 11.16 but AU roaming in MV 2.71….reciprocity?

12

Calling home:

Classification of Outgoing Call to Home Country, by roaming country

HighLow

High




Indonesia, Laos, Philippines

Brunei

Myanmar, Singapore, Thailand, Vietnam

Cambodia, Malaysia

Maldives, NepalBangladesh, Nepal, Pakistan

Australia, French Polynesia, Palau, Papua New Guinea, Reunion, Vanuatu

Cook Islands, Fiji, Samoa, Timor Leste

American Samoa, New Zealand, New Caledonia, Solomon Islands

Mongolia

China, Hong Kong, Japan, Korea

Macau, Taiwan

Afghanistan, Bhutan, India

Guam, Marshall Islands, Tong

13

Sending an SMS: up to USD 1.58

14

Sending SMS: ASEAN countries offering lower rates on average

Classification of Outgoing SMS by roaming country

HighLow

High




BruneiCambodiaIndonesiaPhilippines

Malaysia, Singapore

Thailand

Maldives, NepalBangladesh, Pakistan

Bhutan, Sri Lanka

Guam, Papua New Guinea, Reunion, Tonga

Fiji, French Polynesia, New Zealand, Palau

Australia, Cook Island, Vanuatu

Mongolia

China, Japan

Macau, Taiwan

Afghanistan, India

New Caledonia

Hong Kong SAR

15

Some consistency irrespective of type of call/SMS. E.g. Many SE Asian countries repeatedly in Lower Left Quadrant (cheap, don’t discriminate). Many E Asian countries in left column (cheap)

Countries falling into same quadrant at least 67% of the instances

HighLow

High




MaldivesMongolia

NepalPalau

Papua New Guinea Reunion

BruneiKoreaMacau

Pakistan

American SamoaChina

IndonesiaJapan

MalaysiaSingapore

TaiwanThailandVanuatu Vietnam

AfghanistanFiji

16

The EU Directive on Roaming has eliminated the variability of prices paid by customers (when roaming in the EU)

17

What do we know about the BOP & International calls?

Some data for LIRNEasia Teleuse@BOP survey

18

Majority @ the BOP has access; but ownership of phones is low

South Asia South East Asia

Pakistan India Sri Lanka Philippines Thailand

% who have Used phone in last 3 months

98% 94% 92% 93% 95%

Pakistan India Sri Lanka

Philippines

Thailand

Don’t own a phone

63.6% 80.7% 59.0% 38.0% 18.0%

Don't own a phone

280.1 million (70.6%)

Own a phone116.5 million

(29.4%)

Most users @ the BOP are non-owners

19

Mostly local calling @ the BOP. But some International from LK and PH. Migrant workers?

Type of call (local, long distance, international)

71%78%

62%

88% 84%

28%22%

34%

6% 16%

1% 0% 4% 6% 1%

0%10%20%30%40%50%60%70%80%90%

100%

Pakistan India Sri Lanka Philipines Thailand

% o

f c

alls International call

Long distance call

Local call

1.5 million expat workers from Sri Lanka

Mostly in the Middle East

840,000 women and 660.000 men separated from their families…talking?

1.5 million expat workers from Sri Lanka

Mostly in the Middle East

840,000 women and 660.000 men separated from their families…talking?

20

Profiling the BOP International Caller

Sri Lanka: Primarily RURAL FEMALES

– With primary & secondary education

– Aged 25 – 54

Philippines: Mostly URBAN MALES

– With higher levels of education

– Below 34

Sri Lanka: trained & untrained laborers (25 %); Farmers / agricultural workers (16%); Housewives (13%)

Philippines: mostly housewives (32%), those employed in services (18%) or unemployed (17%)

21

More international calls made by females

28.8%

46.1%

71.2%

53.9%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Sri Lanka Philippines

% o

f int

erna

tiona

l cal

ls

FemaleMale

22

BOP International Calls are made from Rural Sri Lanka. But urban Philippines

11.7%

70.9%

88.3%

29.1%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%


% o

f int

erna

tiona

l cal

ls

RuralUrban

23

Most international calls made by those under 44 in Sri Lanka. But younger (under 34) in the Philippines

5.4%

29.7%

36.9%

25.2%

2.7%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

18-24 25-34 35-44 45-54 55+

Age of the respondent

% o

f int

erna

tiona

l cal

ls

Sri Lanka

30.1%

32.0%

16.5%

9.2%

12.1%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

18-24 25-34 35-44 45-54 55+

Age of the respondent

% o

f int

erna

tiona

l cal

ls

Philippines

24

Slightly higher level of educational attainment in the Philippines than in Sri Lanka

97%

67%

3%

19%

0%

14%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


% o

f int

erna

tiona

l cal

ls

Graduate

Diploma level

Primary or secondaryeducation

25

What phones do the BOP use to call? Public phones in S Asia. Communal use (sharing with friends/family) in S E Asia.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Non-ow ners

% o

f n

on

-ow

ner

s at

th

e B

OP

Public phone

Relative / friend's phone

Neighbor's phone

Mobile of another householdmember

26

For non-owners, affordability is the biggest barrier to getting connected

Reasons for not owning a phone

75% 82%72% 77% 77%

18%16%

19% 15% 15%

7% 8% 7% 7%2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


% o

f n

on

-ow

ner

s at

BO

P

I cannot afford it Don't need one Other

27

The BOP thinks the initial cost of getting the connection (phone + activation etc) are not affordable

Expected cost of a new phone by non-owners

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Pakistan India Sri Lanka Philippines

% o

f non

-ow

ners

at B

OP

>USD 176

USD 146-175

USD 116-145

USD 86-115

USD 56-85

USD 26-55

<USD 25

Initial cost that prospective owner can afford

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


% o

f pro

spec

tive

owne

rs a

t the

BO

P More than USD 71

USD 51 - 70

USD 31 - 50

USD 10 - 30

Less than USD 10

Expected Costs > Ability to pay

28

But recurring costs (call charges per month) are in line with affordability

Monthly charges: expected vs. affordable

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%af

ford

able

expe

cted

affo

rdab

le

expe

cted

affo

rdab

le

expe

cted

affo

rdab

le

expe

cted


% o

f us

ers More than USD 20

USD 11 - 15USD 5 - 10Less than USD 5

At USD 5 ARPU, a profitable potential market

E.g. Till recently S Asian operators were on USD 3- 4 ARPU, and ~ 50% + EBITDA margins

At USD 5 ARPU, a profitable potential market

E.g. Till recently S Asian operators were on USD 3- 4 ARPU, and ~ 50% + EBITDA margins

29

Many planned to purchase a phone (by 2008). 115 million new connections, not counting 2nd SIM cards

36%

19%

41%

62%

77%

70%

50%

72%78%

86%

0

25

50

75

100

125

150


Con

nect

ion

s at

BO

P (

mill

ions

)

0%

20%

40%

60%

80%

100%

% o

f ho

useh

olds

at

BO

P w

ith a

tel

epho

ne

Already own something Don't own but plan to buy

Current ownership at BOP (%) Penetration at BOP by mid 2008

Don't own and don't

plan to buy: 41.7%

(165 m)

Don't own but plan to buy:

28.9 %(115 m)

Already own a phone 29.4 %(116 m)

30

They planned to get new mobile phones mostly. Not fixed phones (except in Sri Lanka)

Type of phone prospective owners would buy

23% 29%

52%

8%

68%67%

40%

91%

9% 4% 7% 1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Not decided yet

Mobile

Fixed phone

31

Low internet awareness…

36.0%

71.9%

28.6%

14.3%

35.7%

0%

10%

20%

30%

40%

50%

60%

70%

80%


% o

f bo

ttom

of th

e py

ram

id

Not heard of Internet

32

Equally low internet usage…


Respondents at the BOP who have

Used the Internet

1.9% 0.3% 1.5% 8.8% 10.4%

….huge opportunity for mobile data services??

33

Thank you. More at www.lirneasia.net

34

Broadband Prices

35

Annual leased line and BB prices, March 2008 (excluding installation charges, discounts)

Country2

2Mbps, 2km DPLC3 (p.a4)

2Mbps, 100km DPLC5 (p.a)

2Mbps broadband business connection (p.a)6

256kbps broadband business connection (p.a)6

256kbps broadband residential connection (p.a)6

Afghanistan 12,0007 N/O8 N/O N/O N/O

Nepal 55,3939 2,760,2909 57,38510 8,60810 6,69510

Bangladesh 23,39311 N/O N/O 8,01612 2,68013

Pakistan 4914 2,43714 N/O 96415 96415

India 43216 4.44716 3,77917 24118 37917

Bhutan 2,43819 18,28319 4,54020 30321 30321

Sri Lanka 3,24922 6,35023 55624 25025 25025

Maldives 18,80326 40,75627 16,61928 2,09129 37930

EU average 35831 - 16431 11931 11931

Source: LIRNEasia research. See footnotes for specific details

36

Liberalizing the IGW

Indonesia Example

37

Indonesia: Even after partial IGW liberalization minutes and international revenue increased by about 100%

2004: Partial Liberalization of IGW

Source: LIRNEasia research Estimate 40% of all int’l calls by-pass legal channels prior to 2004

38

Mobile Prices

Example from the SAARC Region

39

South Asia is offers the cheapest prices globally (Nokia TCO study). But affordability varies

8.33 5.25

2.46 3.34 3.72 5.46 3.83 5.48

32.93

21.55

11.66 10.57 15.04

17.25 13.39

17.05

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

Afg

han

ista

n

Nep

al

Ban

glad

esh

Pak

ista

n

Indi

a

Bh

uta

n

Sri

Lan

ka

Mal

dive

s

Afg

han

ista

n

Nep

al

Ban

glad

esh

Pak

ista

n

Indi

a

Bh

uta

n

Sri

Lan

ka

Mal

dive

s

US

D, U

SD

PP

P

Monthly prepaid mobile cost for a low user (USD and USD PPP)

40

BD, IN, PK, LK consistently offering cheap prices. For prepaid and post paid

41

42

43

44

45

46

47

48

49

50

51

52

References, notes

53

Sources & Notes: International Direct Dialing Data

Afghanistan Roshan Telecom , http://www.roshan.af/web/?page_id=472, Rates are applicable for calling both Fixed and Mobile phones

Bangladesh GrameenPhone

Bhutan Bhutan Telecom, http://www.druknet.bt/btelecom/index.php?option=com_content&task=view&id=28&Itemid=42 , Prepaid package IDD rates.

India Bharti Airtel, http://www.airtel.in/Prepaid_tarrifs.aspx?path=1/6/6/2&cid=2 , Prepaid package Airtel Regular IDD rates; Calls terminating on fixed lines only

Maldives Dhiraagu, http://www.dhiraagu.com.mv/beta/fixed/international_services/idd.php?country=bang

Nepal Spice Nepal, http://www.spicenepal.com/index.php?option=com_content&task=view&id=33 , Prepaid package IDD rates

Pakistan Mobilink GSM, http://www.mobilinkgsm.com/idd/index.php, Prepaid package Jazz Budget IDD rates; Calls terminating on fixed lines only

Sri Lanka Dialog GSM, http://www.dialog.lk/en/mobile/services/services.html , Rates are applicable for calling both Fixed and Mobile phones

Exchange rates obtained from http://finance.yahoo.com/currency on 21 May 2008.

54

Sources: International Roaming Data Afghanistan Roshan Telecom American Samoa American Samoa

Telecom Australia Telstra Bangladesh GrameenPhone Bhutan Bhutan Telecom Brunei B Mobile Cambodia CamGSM China China Mobile Cook Islands Telecom New Zealand Fiji Vodafone French Polynesia Vini Guam GuamCell Hong kong CSL Indonesia Telkomsel India Bharti Airtel/Reliance Mobile Japan NTT DoCoMo Kiribati Telecom Services Kiribati Limited Korea SK Telecom Laos Lao Telecommunications Macau 3

Malaysia Maxis Maldives Dhiraagu Marshall Islands National

Telecommunications Authority Micronesia FSMTC Mongolia MobiCom Myanmar MPT Nepal Spice Nepal New Zealand Vodafone New Caledonia Office des Postes et

Télécommunications de Nouvelle-Calédonie

Niue Telecom Niue Norfolk Island Norfolk Telecom, Northern Mariana Islands GuamCell Pakistan Mobilink GSM Palau Palau Mobile Papua New Guinea Bee Mobile, Philippines Globe Telecom Reunion Réunion Telecom, Samoa

SamoaTel

Singapore SingTel Solomon Islands Solomon Islands Telecom Sri Lanka Dialog GSM Taiwan Chunghwa Telecom Thailand AIS Timor L'este Timor Telecom Tonga Tonfon Vanuatu Telecom Vanuatu Vietnam Viettel

All data are for August 2008

55

Sources and Notes: BB prices 1. Prices quoted in local currencies converted to US dollars based on rates found at: http://www.oanda.com/convert/classic at 10/02/2008. Annual prices for a

Domestic Private Leased Circuit not inclusive of installation charges, modem/ router charges, any discounts, VAT or other taxes2. Countries are ranked according to GDP per capita obtained from the World Economic Outlook database, Oct 20073. Also known as a tail cost4. p.a = per annum5. Cost of tail charges + 96km link charge6. The package chosen are those that have an unlimited download capacity, in the event this package was not found the closest available offering was used.7. Rates obtained from ATRA, 2007 data as reported in the earlier document, to be found at http://www.lirneasia.net/wp-contents//uploads/2007/09/bbenchmarks-

page1-v4.pdf8. N/O- No offering was available at time of publication9. Nepal Telecom, http://www.net.np/tariff/int_tariff_new.php10. Radius Communications Pvt Ltd, http://www.radiusnp.com/index.php11. BTTB, for a 5km link, http://www.bttb.net.bd/rates.php#broadband12. Grameen Cybernet Ltd, Fibre-Optic Broadband connection, http://www.citechco.net/pro_int.php13. Agni Systems Ltd, Premium package, guaranteed minimum speed is 256kbps, http://www.agni.com/products/fiber.php14. PTCL, http://www.ptcl.com.pk/contentb.php?NID=4315. PTCL, DSL 1MB unlimited package, http://www.ptcl.com.pk/contentp?NID=4716. BSNL, http://www.bsnl.co.in/service/leased_tariff.htm17. BSNL, http://www.bsnl.co.in/service/dataone_tariff.htm18. MTNL, TriB Unlimited, http://www.mtnldelhi.in/broadband/triband_tariff.htm19. Bhutan Telecom, http://www.druknet.bt/btelecom/index.php?option=com_content&task=view&id=35&Itemid=6220. Bhutan Telecom, DSL 15000, Data limit of 12GB, http://www.druknet.bt/btelecom/index.php?option=com_content&task=view&id=64&Itemid=11221. Bhutan Telecom, DSL 1000, Data limit of 500MB, Does not discriminate between corporate and home users, http://www.druknet.bt/btelecom/index.php?

option=com_content&task=view&id=64&Itemid=11222. SLT, for a 0-33km link23. SLT, for a 33- 99km link24. Dialog, WiMax, 2MB Corporate package, http://www.dialog.lk/en/broadband/product/wimax.html25. SLT, ADSL Office, Home Express, http://www.slt.lk/data/forbusiness/115adsl.htm26. Dhiraagu, http://www.dhiraagu.com.mv/tariffs/dhivehinet.php#dedicatedaccess27. As per data obtained from the earlier document, to be found at http://www.lirneasia.net/wp-contents//uploads/2007/09/bbenchmarks-page1-v4.pdf, Data not

available for this quarter.28. Focus Infocomm, ROL corporate access 2MB, http://www.rol.net.mv/downloads/ROLTariffSheet.pdf, Dhiraagu does not have a 2MB package with an unlimited

offering.29. Dhiraagu, Biz Unlimited package, http://www.dhiraagu.com.mv/tariffs/dhiveinet.php#broadband30. Focus Infocomm, ROL broadband 256 value for homes, http://www.rol.net.mv/downloads/ROLTariffSheet.pdf

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