Composition and evolution of ICT price baskets in AfricaITU Indicator Workshop
Addis Ababa
October 2015
1
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
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 Index3
1 - Africa Prepaid Pricing Index
4
OECD (2010) Mobile Basket Methodology
‣ 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
40 calls/60 SMS prepaid monthly
Basket Methodology Weaknesses
‣ Baskets do not reflect the most popular package but the cheapest product
‣ The same basket is used for all operators: off-net/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
Expanding OECD Methodology to all operators and all products in a country
7
OECD Basket Methodology
Comparing Countries
Comparing Operators
Comparing Products
Comparing countries
8
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
9
Dominant operatorEgypt
GhanaSudan
EthiopiaMauritius
KenyaRwandaTunisiaAlgeria
LibyaSouth Africa
NigeriaUganda
Sierra LeoneNamibia
MozambiqueBotswana
Benin 11.3711.14
10.139.439.26
8.447.27.187
6.335.91
5.064.264.053.9
2.832.732.57 Egypt
GhanaSudan
EthiopiaMauritius
KenyaRwandaTunisiaAlgeria
LibyaSouth Africa
NigeriaUganda
Sierra LeoneNamibia
MozambiqueBotswana
Benin 11.3710.1510.13
8.249.26
7.024.544.97
76.33
5.735.06
1.464.053.9
1.062.13
1.61Cheapest operator
Cheapest Prepaid product in country in US$ Q2 2014
Prices have remained the same in local currency for cheapest dominant Africa (Safaricom Kenya) and South Africa (MTN)
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
Q2
2015
25 2628 27
23
28 28 29 2826
2321
19 18
13 14 14 1416
17.5 17.3 17.8 17.015.0 15.6 14.9 14.6 13.9
12.4 11.7 11.1 10.9 10.27.6 7.5 7.8 7.7 7.4
3.8 3.8 3.8 3.5 3.9 3.8 3.8 3.4 3.3 3.3 3.0 3.0 2.6 2.3 2.3 2.3 1.7 1.7 1.6
Cheapest dominant operator in Africa in USDCheapest dominant operator in South Africa in USDSA Dominant Operator Rank
Alternative comparisons
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
African Prepaid Pricing Index
Prepaid Pricing Methodology
12
13
The Bundled Value Index (BVI)
14
New bundle offerings
15
Need for additional data (ARPU/MoU) to create new baskets
Bundle Value IndexBVI looks at bundles that include voice or sms and data
Bundled Value IndexProducts increase in Q2 2015
New pricing strategy for all operators in country except for SA, Kenya and Ghana
Airtel Tanzania best performing in Q1 2015 toppled by Orange Kenya Q2 2015
South African products closer to bottom of the rank
Ethiopia ranks quite low in terms of value compared to other operators (Q2 2015)
Orange KenyaCV Movel
Unitel (ex T-Mais Cape Verde)Yu Kenya
Airtel GhanaZanzibar Telecom Limited
Smart UgandaAirtel TanzaniaTigo Tanzania
SudaniUganda Telecom
MTCSmart Tanzania
Vodafone GhanaTigo Ghana
Tigo SenegalEtisalat Egypt
InwiAirtel Madagascar
Orange SenegalAirtel Kenya
Vodacom TanzaniaTelma
Movitel MozambiqueAirtel Uganda
Orange MadagascarMTN CameroonVodafone Egypt
MTN South AfricaOrange Africell Uganda
MovicelMobilisCell C
Orange CameroonTigo
MTN UgandaOrange Botswana
MTN NigeriaLibertis (Gabon Telecom)
Ethio TelcoTN Mobile 2.3
2.93.94.55.86.16.26.910.110.111.912.913.618.218.218.719.119.419.720.020.226.628.533.538.343.946.053.956.058.561.7
73.487.289.9
107.3115.7
144.9171.9
197.1197.1
259.7
Q2 2015 BVI best operator
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 2.26
2.85
5.76
9.79
11.23
12.16
12.74
13.00
14.84
15.94
17.74
18.02
18.38
19.42
25.80
39.38
43.23
57.62
73.31
79.71
Q1 2015 BVI best operator
RIA’s Mobile Broadband Pricing Index
19
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
Prepaid data market - Q2 2015Increased countries we collect in Q2 2015 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
TanzaniaKenya
RwandaMozambique
GhanaTunesiaSudan
MauritiusMalawi
South AfricaNigerTogo
SenegalBurkina Faso
NigeriaSao Tome and Principe
UgandaEthiopia
BeninAlgeriaLiberia
MaliMali
NamibiaCameroon
MadagascarLesothoZambiaGabon
ChadCote d'Ivoire
AngolaSierra Leone
BostwanaZimbabweSwaziland 37.7
30.028.3
24.022.6
16.916.916.916.5
14.914.6
13.513.2
12.612.6
12.010.210.19.8
9.39.19.1
8.48.48.48.48.28.1
7.35.8
5.24.54.44.44.33.8
Cheapest 1GB price USD Dominant operator in country
RwandaMozambique
TunisiaTanzania
MadagascarNiger
SenegalBurkina Faso
KenyaGhana
Sao Tome and PrincipeEthiopia
BeninAlgeriaMalawi
UgandaLiberia
South AfricaMaliMali
NamibiaNigeria
TogoChad
Cote d'IvoireZambia
CameroonGabon
Sierra LeoneSudan
AngolaLesotho
BostwanaZimbabweSwaziland 37.7
35.030.9
27.324.424.424.023.6
20.218.0
16.916.916.916.7
13.212.612.612.312.011.6
10.610.210.19.8
9.19.19.0
8.48.48.48.18.0
5.24.44.4
1GB price USD Cheapest operator in country
Value for Money Index - Discontinued
23
Download/Upload speed kbps
24
0 10000 20000 30000 40000 50000 60000
Glo Mobile Ghana Airtel Nigeria
Airtel Uganda Orange Botswana Vodacom Tanzania
MTN Rwanda Airrtel Rwanda
Mascom Orange Uganda
Tigo Rwanda Vodafone Ghana
MTN South Africa Orange Kenya
Airtel Ghana Smile Uganda
CellC MTN Nigeria
Vodacom Mozambique MTN Uganda
Smile Tanzania Smile Nigeria
MTC Vodacom South Africa
Telecom Namibia Mobile Safaricom
Average Combined kbps Average Download kbps Average Upload kbps
Source: www.ookla.com
Combined average speed in kbps/1GB price in USDQ1 2014 - Value for money index
25
0
400
800
1200
1600
Safa
ricom
Ken
ya
Voda
com
SA
Smile
Nig
eria
Smile
Tan
zani
a
TN M
obile
Nam
ibia
MTN
Uga
nda
Cel
l C S
A
Ora
nge
Keny
a
MTN
Nam
ibia
Voda
com
Moz
ambi
que
Smile
Uga
nda
Airte
l Gha
na
Voda
fone
Gha
na
MTN
Nig
eria
MTN
SA
Ora
nge
Uga
nda
Voda
com
Tan
zani
a
MTN
Rw
anda
Airte
l Rw
anda
Tigo
Rw
anda
Mas
com
Bot
swan
a
Airte
l Uga
nda
Airte
l Nig
eria
Glo
Mob
ile G
hana
Ora
nge
Bots
wan
a
Postpaid Value Index (PVI)
26
The Postpaid Value Index
27
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
The Postpaid Value Index
28
Applied Example: South Africa
29
What do we do with all this information? Policy example
30
Cost of cheapest prepaid mobile product for OECD 40 calls/60 SMSs basket by operators in ZAR
South Africa - Decline in MTR’s
31
0
45
90
135
180
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Telkom Mobile Cell C MTN South AfricaVirgin Mobile Vodacom South Africa
MTR 40c
Amendment MTR 20c, asymmetry
44c
Summary
32
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