Now in its sixth year, this annual report identifies key information and communication technology (ICT) developments and tracks the cost and affordability of ICT services, in accordance with internationally agreed methodologies.
The report aims to provide an objective international performance evaluation based on quantitative indicators and benchmarks,
While the prices of fixed and mobile services continue to decrease globally, in most developing countries the cost of a fixed-broadband plan represents more than 5 per cent of GNI per capita,
An enabling telecommunication regulatory environment can significantly influence the affordability of services. The report finds that the price of ICT services falls with better market regulation and increased competition.
For example, in developing countries, fixed-broadband prices could be reduced by 10 per cent and mobile-cellular prices by 5 per cent if competition and/or the regulatory framework improved.
International regulatory best practices such as the ones adopted by the ITU Global Symposium for Regulators (GSR),
which can lay the foundations for affordable fixed-broadband services. In this fast-changing digital era, one of the key challenges in measuring the information society is the lack of up-to-date data, in particular in developing countries.
and have one of the greatest development potentials in view of the widespread use and availability of mobile networks and services.
and Michael Minges to the compilation of data on international bandwidth, revenue and investment. Helpful inputs and suggestions were received from Joan Calzada Aymerich from the University of Barcelona (Chapter 4), Jake Kendall from the Gates Foundation, Anoush Tatevossian and Alex Rutherford from UN Global Pulse,
4 1. 4 Revenue and investment in the telecommunication sector...13 1. 5 Use of ICTS...
101 vii Chapter 4. ICT prices and the role of competition...107 4. 1 Introduction...
140 4. 5 The impact of competition and regulation on telecommunication prices...152 Chapter 5. The role of big data for ICT monitoring and for development...
13 1. 14 Annual investment by telecommunication operators, world and by level of development, 2007-2012, total in USD (left) and annual growth (right...
17 1. 19 Fixed-broadband access in enterprises using the Internet, selected countries, 2005-2012.19 1. 20 E-government Development Index (EGDI),
2003-2014.20 ix 1. 21 E-government services provided by countries (transactional services, left, and e-participation services, right)..
20 1. 22 Proportion of schools with Internet access (total and fixed-broadband), 2012 or latest year available...
services by type of service, by level of development, 2013 and 2012.127 4. 12 Mobile-broadband prices, in PPP$, world and by level of development, 2013.217 4. 13 Mobile
and equivalized household consumption expenditure (right), by deciles, 2013.151 4. 21 Competition in fixed-broadband markets and fixed-broadband prices as a percentage of GNI p. c
.,2008-2013.155 4. 22 Competition in mobile markets and mobilecellular prices as a percentage of GNI p. c.,
78 4. 1 Mobile-broadband services by type of device/plan...125 4. 2 Relationship between regulation, competition and prices...
154 4. 3 Composition of the variable measuring the regulatory environment...156 5. 1 The five Vs of big data...
176 5. 2 An overview of telecom network data...182 5. 3 Customer profiling using telecom big data...
77 3. 1 IDI by region, 2013 and 2012.84 3. 2 The top five economies in each region and their ranking in the global IDI, 2013.85 3. 3
in the spread of information and communication technology (ICT) infrastructure and in ICT uptake by citizens and public and private organizations.
where mobilebroadband services provide a response to the demand for high-speed Internet access in view of the lack of affordable fixed-broadband services,
affordable high-speed Internet services and the higher levels of skills required to make effective use of online content and services,
It will first look at the uptake of ICT infrastructure and services, covering the fixed and mobile (voice and data) market segments,
This will be followed by a presentation of the latest trends in terms of investment and revenue in the telecom sector.
in particular in the context of the post-2015 development debate and the WSIS+10 review, the demand for a data revolution,
at least theoretically, has access to mobile communication services. Closer examination and disaggregation of the data reveal,
and that some people are excluded still from access to communication networks. First, there are populations living in rural areas that are covered not by a mobile-cellular signal (Table 1. 1)
but is closing with the availability of affordable mobile-phone services in rural areas. Further research and data would be necessary to determine people's access to,
and use of, voice communications and to identify other potential barriers, such as those related to poverty, literacy, education or lack of electricity,
20 25 30 Per 100 inhabitants CIS slowdown in fixed-broadband growth in some of the larger economies, such as China, India, the Islamic Republic of Iran and Malaysia.
Somalia and Yemen, for example, no mobile-broadband services are fixed available, but-wireless and satellite services are offered.
In Saudi arabia, 30 per cent of all wireless-broadband subscriptions are fixedwireless and satellite subscriptions.
and will overtake 2g subscriptions in a few years. 4g4 services came onto the market only recently
In developed countries, fixedbroadband infrastructure and services were available much earlier than in most developing countries,
and before fast mobile-broadband services and smartphones entered the market. This has contributed to the higher uptake of fixed broadband in developed countries.
-broadband services are increasingly becoming an alternative to fixed broadband, and indeed the preferred choice of consumers.
data based on ITU and Telecom Advisory Services calculations. more and more countries upgrade their mobile networks. As mentioned earlier, 2g population coverage stands at over 90 per cent worldwide.
as more and more countries are deploying 3g+technologies and services, and given the strong growth in mobile-broadband subscriptions.
At the same time, the issue of spectrum allocation will have to be addressed to ensure that the increasing demand for high-speed mobile access can be met,
and within regions and point to opportunities for service providers to increase their subscriber base (ITU, 2014).
such bandwidth being a key requirement for delivering data-intensive applications and services through high-speed networks.
reflecting the strong investment in backbone infrastructure in all parts Chart 1. 7: Fibre and microwave routes, share of route kilometres (left)
ITU World Telecommunication/ICT Indicators database. connectivity, because of the strong internal demand and also its location:
and affordable services are much less available in rural areas, thus preventing rural households from purchasing Internet services.
At the same time, the benefits brought by ICTS and the Internet are especially impactful in rural areas, which often also lack access to other infrastructure and public services.
and they constitute an established source of information and communication. Research has shown that the potential of libraries
and there are still a number of countries reporting low rates of public access. 1. 4 Revenue and investment in the telecommunication sector In 2012,
The evolution of telecommunication revenues in developed countries follows the overall pattern of their economies as a whole (in the European union, for instance,
and consumer spending on telecommunication services. In addition to the adverse economic context, the voice market in developed countries is declining
and the developments observed in broadband markets are taking place in competitive environments, thus also exerting pressure on the revenues generated by the strongest growing market segments, such as mobile broadband.
This testifies to the growing importance of the telecommunication sector in the economic growth of the developing world.
Chart 1. 14 shows the evolution of investment in telecommunications, which is fundamental to supporting ICT uptake and innovation.
In 2012, investment grew by 4 per cent to USD 307 billion globally. Despite the progression seen in global investment since 2010 (6 per cent compound annual growth rate),
the 2008 investment levels have not been restored. The recovery of investment levels has been hampered by the situation in developed countries,
where the downturn experienced in 2008 was strongest(-16 per cent) and the reduction in telecommunication investment persisted in 2009(-2 per cent).
The overall economic environment of restricted access to capital markets and the efforts of some operators to reduce debt exposure explain the sluggish investment levels seen in 2011 and particularly in 2012.13 In developing countries,
investment in telecommunication infrastructure and services has been more stable, with a smaller drop in 2008(-4 per cent) and moderate growth in the following years (4 per cent compound annual growth rate between 2009 and 2012).
This led to the 2008 investment levels being restored by 2011, and an all-time high of USD 121 billion at end 2012.
The developing countries'share of total investment was almost 40 per cent in 2012, which is compared relatively high with the share of global telecommunication revenues generated in developing countries (32 per cent).
The investment-to-revenue ratio in the telecommunication sector stood at 17 per Chart 1. 14:
Annual investment by telecommunication operators, world and by level of development, 2007-2012, total in USD (left) and annual growth (right) Note:‘
‘World'includes countries accounting for 91 per cent of world GDP.‘‘Developed'includes 35 developed countries accounting for 98 per cent of total GDP in the developed world.‘
‘Developing'includes 45 developing countries accounting for 80 per cent of total GDP in the developing world.
This means that, on average, for each USD 100 generated globally by telecommunication services, USD 17 were reinvested in capital expenditure
and improve telecommunication services). The investment-to-revenue ratio was somewhat lower in developed countries (15 per cent) than in developing countries (22 per cent.
In other words, the investments made in developing countries were larger relative to the revenues they generated.
This may be explained by two factors. On the one hand, telecommunications is a capital-intensive industry and part of the capital investments are delivered by global equipment providers,
resulting in only limited investment cost reductions across countries. 14 On the other hand, revenue per user in several developing countries is constrained by low income levels,
which limit the margin for revenue growth. 15 These constraints call for innovative approaches in the developing world,
in order to provide incentives for operators to make the investments necessary to bridge the infrastructure gap between developing and developed countries. 1. 5 Use of ICTS Internet users ITU estimates that, by end 2014,
In view of infrastructure limitations and a lack of affordable services, people are more likely to use the Internet at locations outside the home,
and more than 100 hours of video content are uploaded every minute on Youtube, the leading international videofilesharing site with services in 61 countries.
E-business Private-sector enterprises are early adopters of ICTS, and are driving the information economy across the globe by providing online services
and content, engaging in e-business at both the wholesale and retail levels, and transforming entire business sectors
The diffusion of ICTS in the economy has been found to facilitate macroeconomic performance and business growth by increasing labour productivity
enlarging enterprises'market reach, saving costs and driving innovation (Partnership, 2014. International data on ICT access
and use by enterprises are collected annually by the United nations Conference on Trade and Development (UNCTAD),
but availability is limited apart from the European region where countries carry out annual surveys on the use of ICTS in enterprises (compiled by Eurostat).
The latest results show that in Europe Internet access in enterprises stood at 95 per cent in 2012 (up from 94 per cent a year earlier)
a recent Eurostat survey revealed that more and more enterprises are making use of social media. In 2013
around 30 per cent of European enterprises used social media, ranging from 15 per cent of enterprises in Latvia to 55 per cent in Malta. 18 Activities are mostly related to social networks (e g.
In the developing world, data on ICTS in enterprises are scarce and only collected by few countries.
In addition, Internet access differs enormously according to the size and location of the enterprise small and Table 1. 2:
Society Report 2014 micro businesses are connected much less than large enterprises, and rural enterprises are connected less than urban
enterprises (Partnership, 2014. As has been shown earlier in this chapter, backbone connectivity and international Internet bandwidth is still lacking in many regions of the developing world.
Access to high-speed quality broadband services, however, is especially important to the business sector, in the same way as other basic infrastructure and services necessary to run a successful business.
E-government Not only are government entities major users of ICTS, but governments are also increasingly using the Internet to provide services to their citizens.
E-government contributes to increased efficiency and greater transparency and accountability in government, reduces cost
and improves service delivery. There is little data on the use of ICTS by government organizations
More information is available about government services provided online, tracked by the United nations through its E-government Survey,
When it comes to the provision of e-services, the results from the latest UN survey show that considerable progress has been made over the past decade.
For example, online information and services on government website portals increased threefold, with 70 per cent of countries providing a one-stop shop portal in 2012,
Fixed-broadband access in enterprises using the Internet, selected countries, 2005-2012 Source: UNCTAD Information Economy Database, 2014, available at unctadstat. unctad. org.
Percentage of enterprises 92 85 78 72 43 31 30 50 18 14 0 10 20 30 40 50 60 70
80 90 100 2005 2006 2007 2008 2009 2010 2011 2012 Uruguay Colombia Brazil Singapore Russian Federation Palestine Kyrgyzstan Egypt
and more and more countries are providing e-government transactional services and e-participation services (Chart 1. 21).
E-government services provided by countries (transactional services, left, and e-participation services, right) Source:
UNDESA. Data from United nations E-government Survey (2014). 101 73 60 46 44 42 41 40 39 33 29 27 76 0
) Linear (Europe) Linear (Oceania) Linear (World) EGDI 21 Measuring the Information Society Report 2014 Transactional services are advanced relatively services that are increasingly being provided by governments.
when it comes to transactional services and e-participation services (Chart 1. 21). While, globally, around 20 per cent of countries provided information to their citizens on national e-participation policies in 2013,
and given the growth of mobile-broadband services, it may be expected that more and more schools will have broadband access in the near future
In cooperation with the private sector, make available benefits of new technologies, especially information and communications.
economic growth, environmental balance and social inclusion. At its meeting in May 2014, the UN Commission on Science and Technology for Development (CSTD),
and communication technologies for development and considers that it should be reflected as appropriate in the post-2015 development agenda. 27 As in past resolutions endorsed by ECOSOC,
ICTS will continue to play a major role in facilitating access to information, knowledge and key services.
In addition, diffusion of ICTS in the economy has been found to facilitate macroeconomic performance and business growth by increasing labour productivity, enlarging enterprises'market reach, saving on costs and fostering innovation.
Access to new technologies is important for ensuring full participation by all people in new opportunities related to employment
education, health, governance or peace-building, thus accelerating progress towards the achievement of other development goals.
and high-speed communication networks become an indispensable infrastructure, the tracking and measurement of ICT developments become even more relevant.
analysed and disseminated, in view of the large data gaps prevailing in many developing countries in basic statistics in the areas of the economy, health education, labour, etc.,
besides governments, other stakeholders such as the private sector, civil 27 Measuring the Information Society Report 2014 Box 1. 2:
and with the increasing focus on the opportunities offered by ICTS to developing countries, calls surfaced for reliable and comparable data
and economy and the Partnership has contributed significantly to monitoring and tracking those changes, by developing new indicators and standards, providing technical assistance to developing countries
covering many aspects of the information society and economy, is used widely by countries in the course of their national ICT data collection.
or a computer are now being collected by more than 100 economies worldwide, and data on Internet use in businesses by almost 70 countries,
Broadband services should cost no more than 5%of average monthly income in developing countries by 2020 Target 2. 4:
Worldwide, 90%of the rural population should be covered by broadband services by 2020c Target 2. 5. A:
Enabling environments ensuring accessible telecommunications/ICTS for persons with disabilities should be established in all countries by 2020 Goal 3. Sustainability Manage challenges resulting from telecommunication/ICT development Target 3. 1:
and adapt to the changing telecommunication/ICT environment Target 4. 1: Telecommunication/ICT environment conducive to innovation Target 4. 2:
Effective partnerships of stakeholders in the telecommunication/ICT environment society and international organizations should be involved. New data sources could include big data (mostly provided by private-sector companies)
which could help improve the timeliness and completeness of data, without compromising the relevance, impartiality and methodological soundness of the statistics (UNSC, 2014).
thus complementing official statistics on the economy, society and environment. Furthermore administrative records, which are used widely by official Note:
acost of ICT services to be 60 per cent of the 2012 value. bexisting and additional targets for Goal 2 are being reviewed and adjusted, based on contributions from Member States. c Due to data limitations,
including guidelines for all the legal aspects To formulate an adequate communication strategy for data providers
foster communication and advocacy of the use of big data for policy applications; and build public trust in the use of private-sector big data for official statistics.
public entities and private enterprises will be essential in order to identify the extent to which stakeholders in the ICT sector can be used as an alternative data source.
Without ICTS, no ICT-driven data revolution will take place. In view of the link between big data and ICTS, work is under way in ITU with a view to contributing to the debate
Delegates attending the eleventh World Telecommunication/ICT Indicators Symposium (WTIS) in Mexico city in December 2014 recommended that ITU should further examine the challenges and opportunities of big data,
and that national statistical offices, in cooperation with other relevant agencies, should look into the opportunities for big data and address current challenges in terms of big data quality,
32 In view of the ubiquitous availability of communication networks, the use of new information technologies (e g. mobile technologies) should be leveraged for improving the collection
in this regard, traditional statistical processes should be made more efficient Sustained investment in national statistical capacity,
and also include investment in the development of concepts, measurement frameworks, classifications and standards New,
and satisfy the demand for data needs in new areas, such as big data, geospatial information and geographical information systems Open data policies should be envisaged to ensure accountability
://www. censusindia. gov. in/2011census/hlo/Data sheet/India/Communication. pdf. 4 4g refers to fourth-generation mobile network or service.
The Economist, April 12 2014, Nigeria's GDP step change. 13 Telefónica, for instance, reduced its net debt by EUR 4 819 million in 2012 after several years of sustained increases in borrowings.
but that is only a part of the total CAPEX of telecommunication operators. 15 For instance, the average revenue per user per month for GSM services in India was less than USD 2 in March 2012,
2011.20 The UN E-government Development Index is a composite benchmarking indicator based on a direct assessment of the state of national online services, telecommunication infrastructure and human capital in all countries.
The ICT Development Index (IDI) 2. 1 Introduction to the IDI1 The ICT Development Index (IDI) is a composite index combining 11 indicators into one benchmark measure that serves to monitor
and compare developments in information and communication technology (ICT) across countries. The IDI was developed by ITU in 2008 and first presented in the 2009 edition of Measuring the Information Society (ITU, 2009.
Economic growth and development will remain below potential if economies are not capable of exploiting new technologies
and reaping their benefits. Therefore, the IDI includes a measurement of the capability to use ICTS effectively.
in order for a household to have access to ICT equipment or services, the equipment/service should generally be available for use by all members of the household at any time,
There were three economies that were identified as outliers, namely Hong kong (China), Luxembourg and Malta. The reference value for mobile-cellular subscriptions was lowered to 120.
No fewer than 104 economies of the 166 included in the IDI have passed the 100 per cent mobile-cellular penetration mark.
one possibility would be to replace the subscription-based (supply-side) data with data based on national household surveys (demand-side indicators).
therefore provide a more accurate picture of the actual uptake, use and distribution of mobile-cellular services.
Overall, this version of the IDI includes 166 countries/economies as compared with 157 in last year's edition.
Finland and Luxembourg) and include an additional economy from Asia and the Pacific (Hong kong, China)( Table 2. 2). Differences in IDI value between the top performers are very small.
ICT Development Index (IDI), 2012 and 2013 Economy Rank 2013 IDI 2013 Rank 2012 IDI 2012 Economy Rank 2013 IDI 2013
IDI access sub-index, 2012 and 2013 Economy Rank 2013 Access 2013 Rank 2012 Access 2012 Economy Rank 2013 Access 2013 Rank 2012
IDI use sub-index, 2012 and 2013 Economy Rank 2013 Use 2013 Rank 2012 Use 2012 Economy Rank 2013 Use 2013 Rank 2012
IDI skills sub-index, 2012 and 2013 Economy Rank 2013 Skills 2013 Rank 2012 Skills 2012 Economy Rank 2013 Skills 2013
with all of the top ten countries being high-income economies (see section 2. 3). 6 The following section looks at the performance of the top ten countries of IDI 2013.
Having regard to the general economic downturn, Denmark's government sees ICTS as a major driver for growth, innovation and economic development (Government of Denmark, 2012).
The Danish Internet service provider (ISP) TDC is making investments to provide access to ultra-fast speeds for over half a million households. 9 Denmark enjoys abundant international Internet bandwidth of more than 260 000 bit
in order to meet the increasing demand generated by wireless-broadband services. There is an obligation for the licensees to ensure that by 2015 users in areas with the lowest speeds will Chart 2. 1:
Fixedbroadband and wireless-broadband penetration stand at top levels at 38 per cent and 105 per cent, respectively (see Chart 2. 1). The Republic of korea was the first country to offer 3g services
and policy-makers has shifted from access to wireless services to improving quality and speed. In July 2013, SK TELECOM launched the world`s first LTE-Advanced Network
There is however a sizeable domestic demand for data driven by the high volume of local content,
Furthermore, it launched a publicprivate partnership on 5g (5g PPP) in late 2013 that aims to deliver solutions, architectures, technologies and standards for the ubiquitous next-generation communication infrastructures of the coming decade.
with EUR 700 million coming from the European commission and the private sector set to match this investment by up to five times. 13 European top performers stand out
The economy ranks in ninth position, with an IDI value of 8. 28. Hong kong (China) is particularly strong on the access sub-index of the IDI,
For instance, mobile-broadband services were commercialized only in mid-2013 in Burkina faso, 21 which is among the most dynamic countries on the use sub-index(+13 ranks).
Other most dynamic countries have seen a significant increase in the number of wireless-broadband subscriptions from 2012 to 2013 due to a rise in competition (i e. the awarding of further licences),
et des Communications Electroniques, 2011), placing the country among the most dynamic on the use sub-index.
Mobile-broadband services were launched only in December 2011, and by 2013 operator CVMOVEL had expanded 3g services to all the islands of the archipelago. 23 Bhutan is one of the most dynamic countries in the use sub-index, moving up eight places.
The country ranks 123rd in the IDI 2013. While mobilebroadband services were introduced as early as 2008 by state-owned operator Bhutan Telecom (under its B-Mobile brand),
major developments took place in 2013 that helped to boost penetration from only 2. 5 per cent in 2012 to 16 per cent in 2013 (see Chart 2. 3). Bhutan Telecom expanded its 3g services,
which had been limited to the nation's capital Thimphu, to 15 out of 20 districts in Bhutan.
Bhutan Telecom launched its high-speed 4g services in Thimphu Chart 2. 3: Wireless-broadband penetration, Bhutan, 2008-2013 Source:
The launch of mobile-broadband services by the country's only private-owned operator Tashi Cell in late 2013 has helped to increase coverage and competition in the market,
which in turn has led to higher adoption rates. 25 Apart from those major improvements in access to wireless-broadband services,
which prioritizes broadband infrastructure development to make services faster, more affordable and more secure. One of the core projects of the Qatar National Broadband Network is the deployment of a fibre-optic network infrastructure. 33 Chart 2. 1:
Penetration rates stand at 138 per cent for mobile-cellular and 52 per cent for wireless-broadband services by end 2013.
only surpassed by the region's highincome economies. The launch of 3g was anticipated much in Thailand,
The rapid uptake of mobile-broadband services was spurred by heated competition among operators offering subsidized smartphones
operators further extended their wireless infrastructure and services throughout Thailand, and are planning to provide further network updates. 36 Figure 2. 3:
the availability and uptake of wireless-broadband and fixedbroadband services in particular is limited still relatively. On average
While many developing countries saw important increases in their use sub-index value following the introduction of 3g services in 2012/2013,
there were still a few countries that had launched not services by end 2013. In 2014, close to 4. 3 billion people, most of them living in the developing world, were not using the Internet.
Countries differ significantly in terms of land area, size of the economy, population or geographic location. Indeed, adverse geography is cited often by economists to explain why some countries are doing better than others in terms of economic development. 37 Jeffrey Sachs argues that geography matters
because it affects Chapter 2. The ICT Development Index (IDI) 58 Box 2. 2: The world's least connected countries (LCCS) The world's least connected countries (LCCS) are the group of 42 countries that fall within the low IDI group,
Basic voice services are more widely available although LCCS like Eritrea (6 per cent), Myanmar (13 per cent) and Cuba (18 per cent) still have very low mobile-cellular penetration levels.
There are also some non-LDCS among the least connected, most notably such populous economies as India, Pakistan and Nigeria.
Above 2. 78 LCC (2. 78 and below) Data not available 59 Measuring the Information Society Report 2014 the profitability of various kinds of economic activities (Sachs, 2012.
Methodology In order to better understand the relationship between IDI, the economy, geography and population, the following variables were selected for each country:
Gross national income (GNI) per capita: GNI is the sum of value added by all resident producers plus any product taxes (less subsidies) not included in the valuation of output plus net receipts of primary income (compensation of employees
minus income earned in the domestic economy by nonresidents. GNI, calculated in national currency, is converted usually to United states dollars at official exchange rates for comparisons across economies,
although an alternative rate is used when the official exchange rate is judged to diverge by an exceptionally large margin from the rate actually applied in international transactions.
Given the large investments that are required when deploying ICT infrastructure, private operators assess the profitability of providing their service depending on the demand and the specific business case in each geographic area.
The marginal cost of service provision in densely populated urban areas is usually much lower than in rural areas.
Furthermore, in many developing countries a higher proportion of lower-income populations, who might not be able to afford the service,
with the result that operators are not sure of obtaining a return on their investment.
and the size of a country's economy (measured by GNI p. c.).GNI levels are correlated also with other variables, such as population density and share of urban population.
they also often lack the economic means to pay for broadband Internet services, as well as the skills to make effective use of ICTS.
For example, some economies with small land areas such as Barbados, Bahrain, Hong kong (China), Singapore, Monaco, Iceland and Luxembourg have high IDI levels,
and ICT applications to GDP growth and job creation. 39 ICTS also provide increased access to education, government and health services,
and empower people by providing a platform for communication, the impacts of which are more difficult to measure.
and services that may have previously been unavailable, especially to people living in rural and remote areas.
in cooperation with the private sector, make available the benefits of new technologies, especially information and communications.
A comparison of IDI values of the 147 economies for which data were available for 2002 and 2013 shows that the global IDI value has doubled almost from 2. 52 in 2002 to 4. 88 in 2013
The IDI 2002 and IDI 2013 figures were based on the same set of 147 economies
Simple averages based on 147 economies. Source: ITU. strong correlation between GNI p. c.,(most) MDG indicators and IDI.
learning Train teachers through ICT-enhanced services and create networks among teachers Broaden the availability of quality educational materials/resource Increase access to linguistically
voice messaging and mobile apps Online platforms are serving as an information and communication hub for health facilities and supporting conversations between community health workers, midwives, clinicians and expectant mothers MDG6
malaria and other diseases) Increase access to reproductive health information, including information on prevention of diseases Content-sharing platforms that apply mobile services to raise awareness about AIDS
for example by substituting the need to produce physical products through the delivery of e-products and services Climate adaptation:
as percentage of OECD/DAC donors'gross national income 8. 2 Proportion of total bilateral, sector-allocable ODA of OECD/DAC donors to basic social services (basic education
of their gross national incomes 8. 5 ODA received in SIDS as a proportion of their gross national incomes-0. 440-0. 338 177 Target 8. C:
and MDRI Initiatives 8. 12 Debt service as a percentage of exports of goods and services--0. 160 71 Target 8. E:
In cooperation with the private sector, make available the benefits of new technologies, especially information and communications 8. 14 Fixed-telephone subscriptions per 100 inhabitants 8. 15 Mobile-cellular
and facilitate those essential services through the monitoring of maternal health, for example, via SMS and by providing informationsharing platforms (see Box 2. 4). 73 Measuring the Information Society Report 2014 Chart 2. 15:
This points to the possible negative effects that ICTS can have on the environment, as the manufacture and use of ICTS and ICT equipment require increased energy consumption
The significant positive correlation between percentage change in carbon dioxide (CO2) emissions and percentage increase in IDI emphasizes a possible adverse impact that ICTS can exert on the environment.
A similar principle has been adopted for ICT equipment and services, i e. they should be available for use by household members at home,
and the European union define superfast services as those delivering download speeds of 30 Mbit/s or more. 18 https://ec. europa. eu/digital-agenda/en/pillar-4-fast-and-ultra
Czernich, N.,Falck, O.,Kretschmer, T. and Woessmann, L. 2009), Broadband Infrastructure and Economic growth, http://papers. ssrn. com/sol3/papers. cfm?
World bank (2009), Information and Communication for Development: Extending Reach and Increasing Impact, http://go. worldbank. org/NATLOH7HV0.
-pdf. 47 UNCTAD (2011), Measuring the Impacts of Information and Communication Technology for Development, http://unctad. org/en/docs/dtlstict2011d1 en. pdf. 83 Measuring the Information
either side of an important benchmark, as only the CIS and The americas regional averages exceed the world average of 4. 77,
Table 3. 2 presents a comparison of the global and regional rankings of the top five economies in each of the six regions,
The top five economies from Asia and the Pacific also rank relatively high globally, all of them coming in the global top 20.
The top five economies in each region and their ranking in the global IDI, 2013 Regional IDI rank Europe Global IDI rank Asia & Pacific Global IDI
Economy Regional rank 2013 Global rank 2013 IDI 2013 Global rank 2012 IDI 2012 Global rank change 2012-2013 Mauritius 1
but customers are consuming more data, indicating an increase in the intensity of usage. MTN reported a growth of 63 per cent in data volumes in the first half of 2013
high-income economies and are part of the Cooperation Council for the Arab States of the Gulf (GCC).
or more in the majority of countries) are characterized by a high level of competition and high levels of multi-SIM ownership (GSMA and Deloitte, 2013).
Omantel provides discounted broadband Internet offers for eligible customers. 8 Wireless-broadband penetration levels vary considerably across the region.
and Djibouti had launched not yet mobilebroadband services in 2013 (see Chart 3. 5) . However, there is some room for optimism,
and also reflect the fact that mobile-broadband services in the lower-income countries are much less affordable than in the high-income Arab States (see Chapter 3). Fixed-broadband penetration is generally low in the Arab States
Economy Regional rank 2013 Global rank 2013 IDI 2013 Global rank 2012 IDI 2012 Global rank change 2012-2013 Bahrain 1
) services are much more popular in the region. The majority of Arab States have fixed a-broadband penetration of less than 5 per cent, with Syria, Yemen,
Economy Regional rank 2013 Global rank 2013 IDI 2013 Global rank 2012 IDI 2012 Global rank change 2012-2013 Korea (Rep
While some economies, including Australia, Japan, Macao (China), Republic of korea and Singapore, had reached already very high levels of penetration,
with three national operators and several regional operators competing for 143 million potential customers. Data from household surveys collected in a number of CIS countries underline that mobilecellular penetration,
The Russian Federation was one of the first countries in the region to launch 3g services in 2007.21 Since then,
Economy Regional rank 2013 Global rank 2013 IDI 2013 Global rank 2012 IDI 2012 Global rank change 2012-2013 Belarus 1
LTE services were launched in the Russian Federation in 2012.22 The highest growth in wirelessbroadband penetration from 2012 to 2013 took place in Georgia from 9 per cent in 2012 to 17 per cent in 2013 placing it among the most dynamic
Economy Regional rank 2013 Global rank 2013 IDI 2013 Global rank 2012 IDI 2012 Global rank change 2012-2013 Denmark 1
Wireless-broadband services are available in every European country, and the large majority of countries have a penetration rate of more than 50 per cent.
In Albania, the incumbent operator launched its 3g services in early 2013, increasing competition in the market. 25 Operators in Slovakia and Romania have extended
and upgraded their networks and started to offer LTE services to customers. The top five countries in the world in terms of fixed-broadband penetration (Monaco, Switzerland, Denmark, Netherlands and France) are all European.
Average fixed-broadband penetration in the region stands at 27 per cent by end 2013, way above the global average of 9 per cent.
Broadband is almost nonexistent, with wirelessbroadband services still not available in 2013 and a fixed-broadband penetration of less than 1 per cent.
Economy Regional rank 2013 Global rank 2013 IDI 2013 Global rank 2012 IDI 2012 Global rank change 2012-2013 United states 1
LTE services were launched first in the country in early 2013.28 Antigua and barbuda (from 23 per cent to 49 per cent),
services were still not available in Cuba, Dominica, Guyana and St vincent and the Grenadines by end 2013.
-lte-services-brazil/./Endnotes 107 Measuring the Information Society Report 2014 Chapter 4. ICT prices
and the role of competition 4. 1 Introduction The price of ICT services constitutes a determining factor for ICT uptake and,
The importance of affordability also applies to other ICT services, and its impact goes beyond access,
In response to the demand for global benchmarks on ICT prices, ITU has been collecting ICT price data following a harmonized methodology since 2008.
Initially, prices were collected for fixedtelephone, mobile-cellular (voice and SMS) and fixed-broadband services. Since 2012, the data collection has been extended to include mobilebroadband prices.
competition and regulation. The objective is to single out some salient explanatory factors for the affordability of ICT prices,
and offer a quantitative assessment of how policy actions targeting these factors may help in making ICT services more affordable and thus increase ICT access and use.
and the role of competition 108 income distribution stems partly from the tracking of global objectives on poverty reduction,
The effects of competition in driving prices down and fostering innovation have been most apparent in the mobile-cellular market,
where low prepaid prices became a key enabler for the mass uptake of mobile-cellular services observed in the developing world in the last decade;
Regulation sets the framework for competition, and is thus the lever which policymakers and regulators can use to influence competition.
As a result of all the important elements in the analysis of the affordability of ICT prices, competition and regulation are those upon
which telecommunication administrations may exert more direct control. They therefore merit particular attention. This chapter will present
and discuss key metrics for monitoring the global affordability of ICT services. It will first look at prices in the voice market and their evolution in the period 2008-2013.
Then, the affordability of ICT services will be analysed in the light of household income inequalities, thereby quantifying how far lowincome segments of the population may be excluded from the information society by price barriers.
The final part of the chapter will assess the impact of competition and regulation on ICT prices.
Based on an econometric model, a number of conclusions will be presented on the effects of competition and regulation on mobilecellular and fixed-broadband prices.
mobile-cellular and fixed-broadband services), as well as the general IPB ranking combining the three sub-baskets expressed in terms of GNI per capita (GNI p. c.).Prices in this chapter are expressed in three complementary units:
3 Prices are expressed as a percentage of GNI p. c. in order to show them in relative terms to the size of the economy of each country,
and mobile-cellular prices Traditional voice services4 and SMS have become the most ubiquitous ICT services,
highlighting that mobile-broadband services are likewise less available than mobile voice and SMS (see Chapter 1). Subscription figures confirm this:
Such a ubiquitous uptake of voice services would not have been possible without affordable prices. Chart 4. 1 shows the evolution of fixed-telephone and mobile-cellular prices in the period 2008-2013.
Based on 140 economies for which 2008-2013 data on fixed-telephone and mobile-cellular prices were available.
and the role of competition 110 16.2) per month. 6 This compares with an average of PPP$ 53.0
and PPP$ 28.4 (or USD 19.5) per month for a prepaid mobilebroadband service with a 500 MB monthly data allowance. 7 Despite the limitations of comparing such different services,
and mobile-cellular prices are the cheapest among ICT services, suggesting that low prices have contributed to the widespread adoption of traditional voice and SMS services.
Fixed-telephone prices have followed an almost flat evolution, with a small decrease in prices observed during the period in developing countries(-1. 3 per cent compound annual growth rate (CAGR) in the developing world in the period 2008-2013).
. so as to provide an insight into the affordability of fixed-telephone and mobile-cellular services from a demand-side perspective (Chart 4. 2). From this perspective,
voice services are less affordable in developing countries than in developed countries. By end 2013, a basic fixed-telephone service cost on average 1. 0 per cent of GNI per capita in developed countries compared with 5. 2 per cent in developing countries.
Based on 140 economies for which 2008-2013 data on fixed-telephone and mobile-cellular prices were available.
A fixed-line fee is in most cases required for contracting ADSL services. Since ADSL is currently the predominant fixed-broadband technology,
in 43 developing countries mobile-cellular services still cost more than 5 per cent of GNI p. c. in 2013.
The affordability of basic mobile-cellular services remains a major barrier to further adoption in several African countries:
These countries could follow the best practices of other economies in the region, such as Kenya and Ghana,
. on account of the country's low-income level. 10 Further reductions in mobile-cellular prices could be achieved by combining regulatory actions to promote competition such as fostering inter-operator competition
and policy initiatives to strengthen the demand side. Chapter 4. ICT prices and the role of competition 112table 4. 1:
Fixed-telephone sub-basket, 2013 Note:**Data correspond to the GNI per capita (Atlas method) in 2013
or latest available year adjusted with the international inflation rates.****Country not ranked because data on GNI p. c. are not available for the last five years.
Rank Economy Fixed-telephone sub-basket GNI p. c.,USD, 2013*Rank Economy Fixed-telephone sub-basket GNI p. c
or latest available year adjusted with the international inflation rates.****Country not ranked because data on GNI p. c. are not available for the last five years.
Rank Economy Mobile-cellular sub-basket GNI p. c.,USD, 2013*Rank Economy Mobile-cellular sub-basket GNI p. c
and the role of competition 114 Mobile-cellular services are very affordable in most developed countries,
where mobile-cellular services are the least affordable in the developed world. This suggests that cost may be a barrier for further uptake of mobile-cellular services in these countries,
and therefore requires regulatory and policy attention. 4. 3 Broadband prices Fixed broadband Fixed broadband continues to be a critical service for accessing high-speed,
high-capacity and reliable Internet services. Despite the growth of mobile-broadband subscriptions, less than 3 per cent of global IP traffic corresponded to mobile networks by end 2013 according to CISCO estimates (CISCO, 2013.
Based on 143 economies for which 2008-2013 data on fixed-broadband prices were available. Source:
Indeed, the countries with the most expensive fixed-broadband prices, such as Papua new guinea, Rwanda and Vanuatu (all of them with entry-level fixed-broadband services costing more than USD 100) saw little
) The almost flat evolution of entry-level fixed-broadband prices in the developed world suggests that competition in the market is centred around higher-end users contracting higher speeds
and/or fixed broadband bundled with other services. This is in line with the findings on bundle adoption from household surveys (European commission, 2014) and data on fixed (wired)- broadband subscriptions by speed
customers in developing countries are getting a connection five times slower on average than that enjoyed by customers in developed countries.
Despite the progress made in improving the affordability of fixedbroadband services the average price for an entry-level fixed-broadband plan still represented Chart 4. 4:
Based on 143 economies for which 2008-2013 data on fixed-broadband prices were available. Source:
. c. Chapter 4. ICT prices and the role of competition 116 25.8 of GNI p. c. in the developing world at end 2013.
By 2015, entry-level broadband services should be made affordable in developing countries through adequate regulation
This suggests that competition is taking place in other (higher-end) segments of the market,
Based on 165 economies for which 2013 data on fixed-broadband prices were available. Source: ITU.
customers in most urban areas of Ireland can subscribe to FTTH services, thus benefiting from Internet access at high speeds (50 Mbit/s) for as little as USD 19.9
services is the Commonwealth of independent states, with an average price corresponding to 3. 8 per cent of GNI p. c. The differences within the region are slightly larger than in Europe,
corresponding to 0. 5 per cent of GNI p. c. This is explained not only by the country's relatively Chapter 4. ICT prices and the role of competition 118 high gross national income (the highest in the CIS),
and economic growth continues. However, policy and regulatory action will be necessary to step up a gear in broadband adoption,
The scarcity of international Internet bandwidth is confirmed further by the fact that the entry-level plan in Uzbekistan is capped at 1. 2 GB of usage per month,
. and therefore services are less affordable. The relatively high prices in Moldova are explained by the characteristics of the fixed-broadband plan offered by Moldtelecom
These factors suggest that regulatory measures to promote competition and ease the international connectivity bottleneck could help drive prices down to the levels achieved in other CIS countries,
along with Tunisia (Chart 4. 7). Tunisie Telecom offers regular ongoing promotions for ADSL services with some of the most advantageous prices in the region:
which suggests the need for more investment in broadband network equipment and network roll out to enable the take-off of fixed-broadband services in Kuwait.
Mauritania is the Arab country where entry-level fixed-broadband prices are the least affordable.
0. 2 per cent by end 2013, the second lowest in the region after Sudan's. Policy and regulatory actions to address the challenge of unaffordable fixedbroadband services would need to target both the supply
and the demand sides (Box 4. 1). The average price for an entry-level fixedbroadband plan in The americas region corresponds to 0. 6 per cent of GNI per capita, more than twice as much as in the Arab States and CIS,
The United states is the country with the most affordable entry-level fixed-broadband services in the region (0. 7 of GNI p. c),
. Kuwait Qatar Omanbahrain United Arab Emiratestunisiasaudi Arabialebanon Egyptalgeriajordanmorocco Sudanmauritania 23.7 Chapter 4. ICT prices and the role of competition 120box 4. 1:
Challenges for fixed-broadband adoption in Mauritania Unaffordable fixed-broadband services in Mauritania are the result of factors on both the supply and the demand side.
Regulatory interventions to promote competition and to improve international connectivity could greatly contribute to stimulating the fixed-broadband market.
On the demand side GNI per capita in Mauritania is the lowest of all Arab countries included in the comparison of fixed-broadband prices.
In order to advance towards such a challenging target, public policies to support demand for fixed-broadband services could lead to wider adoption
offers affordable fixed-broadband services, including prepaid plans, starting at USD 10.9 for unlimited monthly usage, the cheapest prices in USD in The americas together with those in Panama (USD
Fixedbroadband services in these countries cost more than in the United states, despite the difference in income.
ADSL subscriptions are priced still as premium services with similar tariffs as leased lines. As a result, dial-up (narrowband) Internet remains the de facto technology for Internet access by residential customers in the island. 19 Asia
and the Pacific is a region exhibiting striking contrasts in fixed-broadband prices, with the average price corresponding to 23.7 per cent of GNI p. c
It is home to the economy with the most affordable entry-level fixed-broadband plans
Macao (China), where a fixed-broadband service costs less than 0. 4 per cent of GNI p. c. Chart 4. 9). Other high-income economies in the region
Sustained initiatives to promote ICT skills in these countries could also contribute to promoting fixed-broadband uptake 20 Chapter 4. ICT prices and the role of competition 122chart 4. 9:
In seven African countries (20 per cent of those included in the price benchmark), fixed-broadband plans cost more than 100 per cent of GNI p. c. Chart 4. 10.
The unaffordability of fixed-broadband prices in Africa is linked closely to the small size of the region's economies
Half of the African countries included in the price benchmark have a GNI p. c. below USD 1 000,
For example, entry-level fixed-broadband prices cost less than USD 20 in 65 countries worldwide (39 per cent of the total included in the price benchmark),
Regulatory action to open the international gateways to competition and to facilitate backhaul (e g. by setting a reference offer for the leased lines of the incumbent that provide connectivity to the landing station) could lower barriers to entry in the market,
and stimulate competition in broadband services. This would contribute to opening up fixed-broadband markets to competition in Africa,
and alter the status quo in several African countries, where the market is concentrated in a single operator.
fixed-broadband markets have been opened to a much larger degree of competition in other regions, to the benefit of customers.
These results are explained by the countries'relatively strong economies and therefore high GNI levels, coupled with their low fixed-broadband prices.
Zambia Benin Burkina Fasomalitogo Madagascar Nigerburundimalawi Rwanda Central African Rep. Chapter 4. ICT prices and the role of competition 124 Table 4. 4:
or latest available year adjusted with the international inflation rates.****Country not ranked because data on GNI p. c. are not available for the last five years.
Rank Economy Fixed-broadband sub-basket Speed in Mbit/s Cap per month in GB GNI p. c.,USD, 2013*Rank Economy Fixed
and operators are continuously launching innovative offers to try to attract new customers. On top of the main types of mobile-broadband plans for which ITU collects data on prices (Figure 4. 1),
and Verizon in the United states, are allowing customers to pool the data consumed by different devices in a single subscription. 23 In addition,
Mobile-broadband services by type of device/plan Source: ITU. Mobile broadband Handset-based Computer-based Prepaid Postpaid Prepaid Postpaid Chapter 4. ICT prices
and the role of competition 126 plans are bundled often with mobile voice and SMS. This makes it difficult to isolate the prices of mobile-broadband services,
particularly for postpaid plans where it is sometimes cheaper to buy a package including Internet, voice and SMS than to contract only Internet.
as some operators are starting to offer premium plans (at a higher cost) for mobile-broadband services based on high-speed networks.
This tallies with the situation in respect of voice and SMS mobilecellular services, for which prepaid plans are most popular in the developing world.
There are far fewer countries (121 in 2013) where all four modalities of mobile-broadband services are offered.
Availability of mobile-broadband services by type of service, by level of development, 2013 and 2012 Note:
The price difference between postpaid and prepaid plans is also found in respect of regular mobile-cellular services,
because operators will usually offer lower prices to customers who subscribe to a monthly service, since they generate a more predictable revenue flow.
Unlike in the case of computer-based mobile-broadband services, the prices for postpaid and prepaid handsetbased mobile-broadband plans were similar,
which means that operators are in most cases offering the same rates to postpaid and prepaid smartphone customers.
Based on 119 economies for which data on mobilebroadband prices were available for the four types of plans.
handsetbased (500mb) Postpaid computerbased (1gb) Prepaid computerbased (1gb) PPP$ Developing Developed World Chapter 4. ICT prices and the role of competition 128 common in developing countries,
In terms of USD, mobile-broadband services cost almost the same on average in developed and developing countries (Chart 4. 13.
This suggests that operators in developing countries still have ample room to streamline their mobile-broadband services and offer cheaper prices.
if enough competition exists in the market, these lower costs should be passed on to retail prices.
for fixed-telephone and mobile-cellular services. 26 The fact that this is not fully happening for fixed
-and mobilebroadband services may be explained by the early stage of development of these services in the developing world.
Computer-based services with a monthly allowance of 1 GB are about six times more affordable in developed countries, on average.
Based on 119 economies for which data on mobilebroadband prices were available for the four types of plans.
Based on 119 economies for which data on mobilebroadband prices were available for the four types of plans.
For instance, MTN Cameroon offers lowprice mobile-broadband services priced per connection or per 15 minutes;
mobile-broadband services will have to become more affordable in Africa so that most applications enabled by a broadband connection are within the means of a majority of the population.
corresponding to less than 2 per cent of GNI p. c. for all services. At the other end of the scale, Asia and the Pacific is, together with Africa,
the region were average mobile-broadband prices correspond to significantly more than 5 per cent of GNI p. c. for all services except prepaid handset-based (500 MB).
Based on 119 economies for which data on mobilebroadband prices were available for the four types of plans.
Arab States CIS Europe based mobile-broadband services. The americas region also has average prices corresponding to slightly more than 5 per cent of GNI p. c.
Such high monthly data allowances for prepaid mobile-broadband dongles suggest that these services target high-end customers, rather than the average user.
suggesting that postpaid rather than prepaid is the base offer for regular computer-based mobile-broadband customers.
of competition 130chart 4. 16: Comparison of postpaid fixed-broadband and postpaid computer-based mobile-broadband prices, in USD, by region, 2013 Note:
27 countries in Africa, 14 countries in the Arab States, 29 economies in Asia and the Pacific, 10 countries in the CIS, 41 countries in Europe and 27 countries in The americas.
or fixed-broadband services are unaffordable for a majority of the population. Chart 4. 16 shows a comparison of prices for fixed-broadband and postpaid computer-based mobile-broadband plans with a 1 GB monthly allowance.
because it is the best match for fixed-broadband services: both are postpaid, are based computer
of the African countries included in the price benchmark, mobile-broadband prices were more than USD 10 cheaper per month than fixed-broadband prices.
which the 5 per cent affordability target for broadband services is achieved, thanks to affordable mobile-broadband plans.
such as the lack of international Internet bandwidth, also constrain mobile-broadband services. There are four countries in The americas that attain the 5 per cent affordability target by virtue of cheaper mobile-broadband prices:
and in one out of three countries in Chapter 4. ICT prices and the role of competition 132 Table 4. 5:
Mobile-broadband prices, postpaid handset-based 500 MB, 2013 Rank Economy Mobile-broadband, postpaid handset-based (500 MB) GNI p
Mobile-broadband prices, postpaid handset-based 500 MB, 2013 (continued) Rank Economy Mobile-broadband, postpaid handset-based (500 MB) GNI
or latest available year adjusted with the international inflation rates.****Country not ranked because data on GNI p. c. are not available for the last five years.
Chapter 4. ICT prices and the role of competition 134 Table 4. 6: Mobile-broadband prices, prepaid handset-based 500 MB, 2013 Rank Economy Mobile-broadband, prepaid handset-based (500 MB) GNI p
. c.,USD, 2013*Monthly data allowance (MB) as%of GNI p. c. USD PPP$ 1 Norway 0. 1 8. 34 5 102
or latest available year adjusted with the international inflation rates.****Country not ranked because data on GNI p. c. are not available for the last five years.
Rank Economy Mobile-broadband, prepaid handset-based (500 MB) GNI p. c.,USD, 2013*Monthly data allowance (MB) as%of GNI p
. 16--500 San marino**-26.55 25.64-800 Chapter 4. ICT prices and the role of competition 136 Table 4. 7:
Mobile-broadband prices, postpaid computer-based 1 GB, 2013 Rank Economy Mobile-broadband, postpaid computer-based (1 GB) GNI p
or latest available year adjusted with the international inflation rates.****Country not ranked because data on GNI p. c. are not available for the last five years.
Rank Economy Mobile-broadband, postpaid computer-based (1 GB) GNI p. c.,USD, 2013*Monthly data allowance (MB) as%of GNI p
--7 San marino**-38.50 37.17-1 Syria**-89.09--1 Chapter 4. ICT prices and the role of competition 138 Table 4. 8:
Mobile-broadband prices, prepaid computer-based 1 GB, 2013 Rank Economy Mobile-broadband, prepaid computer-based (1 GB) GNI p
or latest available year adjusted with the international inflation rates.****Country not ranked because data on GNI p. c. are not available for the last five years.
Rank Economy Mobile-broadband, prepaid computer-based (1 GB) GNI p. c.,USD, 2013*Monthly data allowance (MB) as%of GNI p
and the role of competition 140 the region mobile broadband is more than USD 10 cheaper per month.
This reflects the early launch of 3g services in Europe28 and the maturity achieved in the mobilebroadband market, with a mobile-broadband penetration of 57 per cent by end 2013, the highest of all regions.
with Austria, Finland and Iceland featuring in the top ten for all categories of mobile-broadband services (Tables 4. 5 to 4. 8). 4. 4 Income inequality
and broadband prices The affordability of ICT services depends as much on the price of the service itself as on the economic means of the specific customer.
thus showing how much ICT services cost relative to the economic value generated by each country. However, overall economic levels
In order to understand better the affordability of ICT services, other variables such as household disposable income need to be considered.
This section presents a refined analysis of the affordability of broadband services for a number of countries for
and use of, broadband services. Household disposable income and GNI are two fundamentally different economic indicators.
On the one hand, GNI is a macroeconomic aggregate similar to gross domestic product (GDP) and measures the size of a country's economy as a whole
It is a measure of the value of the national production of an economy, and is calculated in the context of national accounts.
these data can be used to obtain a finer-grain indication of the affordability of broadband services for households from different economic levels.
100%population Viet nam South africa Chapter 4. ICT prices and the role of competition 142 broadband prices in terms of GNI p. c.,
Chart 4. 18 uses data on income inequality to reveal differences in the affordability of fixed-broadband services between these two countries,
This example illustrates how income inequalities may explain differences in the affordability of fixed-broadband services within a country,
economic data at the household level also make it possible to determine more precisely the affordability of residential fixed-broadband services.
but also in several countries classified as uppermiddle-income economies by the World bank: several Latin american countries (Colombia, Dominican republic, Ecuador and Peru), two African countries (Angola and South africa) and Belarus, Serbia and Thailand.
These countries should also address the issue of affordability of fixed-broadband services among low and middle-income households,
Top 10%Consumption deciles Angola Uganda As%of household consumption Chapter 4. ICT prices and the role of competition 144table 4. 9:
Chapter 4. ICT prices and the role of competition 146 unaffordable for large segments of the population.
while entry-level prices are affordable for almost all households in high-income economies in the region, in Cambodia,
Mobile broadband The same approach is used to analyse how income inequalities within countries determine the affordability of mobile-broadband services.
because prepaid handset-based is on average the cheapest of the four mobile-broadband services for
and is currently the mobile-broadband service that is available in most countries (Chart 4. 11). 147 Measuring the Information Society Report 2014 Handset-based mobile-broadband services are affordable
which suggests that the unaffordability of handset-based mobile-broadband services for low-and middle-income households is holding back mobile-broadband adoption in the country.
The affordability of prepaid handset-based mobile-broadband services differs considerably across developing countries and within some developing countries because of income inequalities.
In Latin american, for example, the cost of handset-based mobile-broadband services in countries such as Ecuador, El salvador,
On the other hand, in developing countries such as Azerbaijan, Cambodia, Chile, Costa rica, Jordan, Uruguay, Tunisia and Turkey, handsetbased mobile-broadband services are affordable for almost the entire population.
In other developing countries where fixedbroadband services are affordable for most of the population, mobile broadband may help to connect the 20-30 per cent of households with the lowest incomes for which a fixed-broadband plan may be unaffordable,
This assessment of the impact of income inequalities on the affordability of mobilebroadband services is made on the basis of the cost of one handset-based mobile-broadband subscription per household.
such as for instance Australia, Denmark, Finland and Chapter 4. ICT prices and the role of competition 148table 4. 11:
and the role of competition 150 Sweden, there is on average more than one mobile-broadband subscription per person.
Equivalized household disposable income and consumption for other countries based on World bank's Povcalnet data adjusted with ITU estimates on average persons per household. high-income economies (Australia and New zealand) to unaffordable for a majority
>20%equivalized expenditure Chapter 4. ICT prices and the role of competition 152 broadband services:
not only have an impact on the proportion of households within a country that have access to mobilebroadband services,
As a result, affordability may also explain different patterns of use of mobilebroadband services across developing countries,
but also by affordability. 4. 5 The impact of competition and regulation on telecommunication prices The impact of ICTS as development enablers depends on access to ICT services
both access to and use of ICTS are determined to a large extent by the affordability of ICT services.
Therefore, the ultimate goal of policy and regulatory interventions in the sector is often to bring about a sustainable reduction in the prices of ICT services,
and in many cases this is achieved through regulatory actions to promote competition, such as mandating local-loop unbundling
This section presents a quantitative analysis of the role of competition and regulation in shaping prices for mobile-cellular (voice and SMS) and fixed-broadband services.
Among all ICT services mobile cellular and fixed broadband have been selected for the analysis because of the availability of comprehensive data series on the prices for these two services,
There is an extensive body of literature looking at the effects of competition and regulation on ICT adoption. 41 However,
when it comes to analysing the impact of competition and regulation on prices, and is limited often in scope because of lack of data for developing countries.
most of them from the developing world, makes it possible to formulate some genuine global conclusions on the links between competition, regulation and telecommunication prices, based on a worldwide representative sample,
competition and prices The fall in telecommunication prices in the last decade, and in the period analysed in this chapter (2008-2013),
which have made more efficient network infrastructure available at lower cost. 42 A pivotal element for ensuring that lower costs are passed on in terms of lower prices for customers is competition.
In recent decades, there has been a global trend towards the liberalization of telecommunication services and the privatization of incumbent operators.
) Regulators have thus become the custodians of competition in telecommunication services at the country level.
including prices and adoption levels. 45 These findings help shape the conceptual framework for the econometric models presented in this section (Figure 4. 2). Competition directly affects prices in markets where retail prices are deregulated,
and Uruguay that have been created as part of the broadband strategies implemented in these countries. 46 Regulators can also intervene Chapter 4. ICT prices and the role of competition 154 indirectly on retail prices through wholesale price regulation,
as happens in most countries. 47 Regulation also affects the level of competition in each market,
which are important drivers for investment and competition. In addition, regulation can promote efficiency, e g. infrastructure and spectrum efficiency,
the impact of the regulatory environment on prices is measured as the combination of the effects of the regulator's autonomy,
enforcement power, mandate and regime (i e. 2 in Figure 4. 2). The direct impact of regulation on competition (i e. 3 in Figure 4. 2) is considered not,
Relationship between regulation, competition and prices Source: ITU. from the effects of competition on prices (i e. 1 in Figure 4. 2),
which are accounted for by the variables on competition. Market competition is one of the main drivers of affordable prices in telecommunication services.
Chart 4. 21 shows the evolution of average entry-level fixed-broadband prices and competition.
The latter is measured using the Herfindahl-Hirschman Index (HHI) for the fixed-broadband market. The HHI is a measure of market concentration,
and is calculated as the sum of the squared market shares (in terms of number of subscriptions) of each Internet service provider (ISP).
The result ranges from 0 (perfect competition) to 1 (no competition, with only one operator in the market.
The fall in entrylevel fixed-broadband prices coincides with an increase in competition in the period 2008-2013.
Chart 4. 22 shows the evolution of entrylevel prices and competition in mobile-cellular markets,
where the decline in prices during the period 2008-2013 has coincided also with an increase in competition.
however, that there is a causal Competition Regulatory environment Institutional framework Prices Autonomy, enforcement power, mandate and regime of the regulator Retail and wholesale price regulation 2 Competition
& foreign participation allowed by regulation 3 Impact of market competition on prices 1 Legal certainty Level playing field Efficient regulation 155 Measuring the Information Society Report
2014 Chart 4. 21: Competition in fixed-broadband markets and fixed-broadband prices as a percentage of GNI p. c.,2008-2013 Note:
Simple averages for 140 economies with available data on fixed-broadband prices and competition for the period 2008-2013.
Source: ITU. Herfindahl-Hirschman Index (HHI) data sourced from Informa. Chart 4. 22: Competition in mobile markets and mobilecellular prices as a percentage of GNI p. c.,2008-2013 Note:
Simple averages for 140 economies with available data on mobile-cellular prices and competition for the period 2008-2013.
Source: ITU. Herfindahl-Hirschman Index (HHI) data sourced from Informa. competition and the openness of the market to private and foreign investment.
The scores of each cluster are combined into a single value for the Regulatory Tracker. The higher relationship between competition and prices,
because there are other factors apart from competition that may also have contributed to improving the affordability of fixed-broadband and mobile-cellular prices in the period 2008-2013.
For instance, economic development may have increased incomes, and thus made services more affordable even if prices have been kept constant.
Other factors, such as demographic changes migrations or exchange-rate fluctuations, may also have had an impact on the affordability of fixed-broadband and mobile-cellular services.
In order to take into account all these factors, the following section presents an econometric model based on panel data regression.
This enables us to go beyond descriptive statistics and draw some robust conclusions on the link between competition and prices.
The model is applied also to measure the link between regulation and the prices of mobilecellular and fixed-broadband services.
The regulatory environment in each country is assessed based on the ITU ICT Regulatory Tracker (hereinafter the‘Regulatory Tracker'.
each one quantifying a specific aspect of the regulatory environment: Cluster 1: the independence, decision and enforcement powers, autonomy and accountability of the regulatory authority;
the competition framework set by the laws and regulations that defines the level of competition in the different markets (based on what is legally permissible),
. 56 0. 58 0. 60 2008 2009 2010 2011 2012 2013 Fixed-broadband basket as a%of GNI p. c. HHI fixed (competition
)+-HHI fixed broadband (competition) Fixed-broadband basket as%of GNI p. c.+-HHI mobile (competition) Mobile-cellular basket as%of GNI p. c. 0123456789
%of GNI p. c. HHI mobile (competition) Chapter 4. ICT prices and the role of competition 156 the value, the more conducive the regulatory environment to ICT developments.
because it is linked directly to competition, which is considered already in the models through a specific variable on competition (i e. the HHI).
The combined value of clusters 1 to 3 is used to test the link between regulation and prices of mobile-cellular and fixed-broadband services.
Choice of the model The analysis was conducted through econometric modelling using panel regressions for up to 144 countries based on data for the five-year period from 2008 to 2013.
Composition of the variable measuring the regulatory environment Source: ITU. the changes in a variable that is modelled as the dependent variable.
Existence of competition authority 9. Appeals to decisions 8. Dispute resolution mechanism 7. Sanctions or penalties imposed by regulator 6. Enforcement power 5. Public consultations
and mobile-cellular prices and competition and regulation metrics, using panel regressions with fixed effects.
Prices for fixed-broadband and mobile voice services are modelled as two separate variables, as they follow distinctly separate patterns fixed broadband has generally become subject to competition much later than mobile services
and penetration levels are significantly lower for fixed broadband, especially in the developing world. Final prices reflect a number of parameters that characterize a telecommunication market
and are often the result of the simultaneous effects of technology choices, competition and regulation.
It is established well that prices of telecommunication services vary with levels of economic development. Therefore, gross national income per capita (GNI p. c is included in the model to control for the differences in economic resources that play a role in shaping prices.
The deployment of telecommunication networks requires large investments that operators evaluate depending on the demand for the service and the specific business case in each geographic area.
The marginal cost of service provision in dense urban centres is often much lower than that in remote villages, pointing to the different cost per subscriber in urban and rural areas
as well as in dense and sparse agglomerations. These constraints are taken into account in the econometric model by including as a control variable the percentage of population living in urban areas.
The degree of competition for the fixedbroadband and mobile-cellular markets is captured through the Herfindahl-Hirschman Index (HHI),
On the basis of the HHI, a few strong players may provide more competition than several small competitors.
Chapter 4. ICT prices and the role of competition 158box 4. 2: Panel regression models for fixed-broadband and mobile-cellular prices Two models are used for the regressions:
variables GNI p. c. Gross national income per capita in current USD by year and country, as reported by the World bank.%
i e. higher HHI values indicate less competition and, conversely, lower HHI values indicate more competition.
Data sourced from Informa. Herfindahl-Hirschman Index for mobile cellular (voice and SMS: with Li being the number of mobile-cellular subscriptions of firm i,
The Regulatory Tracker is an aggregate benchmark of each country's legal and regulatory frameworks using as a reference internationally recognized regulatory best practices.
ranging from 0 to 72,72 being the most effective regulatory environment to foster ICT developments.
Descriptive statistics calculated for 124 economies that have complete data for the two models. Source: ITU.
Competition in the market as measured by HHI is correlated significantly to prices, and the sign indicates that increased competition reduces prices.
The model suggests that changing from two ISPS with 50 per cent market share each to three ISPS with 33 per cent market share each is linked to a reduction in prices of 5. 8 per cent,
and 3. 2 per cent when moving from four to five ISPS (assuming in all cases Chapter 4. ICT prices and the role of competition 160 equal market shares for all ISPS
50 in other words, competition was not as strong in the developing world. According to the results of the econometric model,
if fixed-broadband markets in developing countries were to achieve the competition levels of developed countries,
The effects of competition on prices could be particularly beneficial in the 21 developing countries that by end 2013 still had no competition in fixed-broadband services.
opening up the market to some competition in the remaining 13 developing economies would be a natural option with a view to boosting fixed-broadband penetration,
This highlights the importance of an enabling regulatory environment for affordable fixed-broadband prices. Although there is no one-size-fits-all approach, international regulatory best practices,
which can lay the foundations for affordable fixed-broadband services. For instance, a country with a separate telecommunication/ICT regulator that has autonomy in decision-making, enforcement power,
and this in turn fosters competition and ultimately contributes to achieving lower fixed-broadband prices. The analysis of the variables that affect fixed-broadband prices cannot be reduced to competition only.
The results previously discussed are only valid if considered in combination with the other explanatory variables included in the model.
because it determines to a great extent how much customers are willing to pay for a given service. In a country with high economic levels, there are potentially more customers who can pay more for the same service than in a country with low economic levels.
According to the results of the econometric model, a country with a GNI p. c. of USD 11 000 is correlated with prices 2. 1 per cent higher than a country with GNI per capita of USD 10 000,
when benchmarking prices of ICT services internationally, rather than as an area of direct policy action.
so that economies with higher percentage of urban population tend to have higher GNI p. c. This means that the effects of both variables cannot be isolated in practice,
The ITU data collection considers a minimum of 1 GB Chapter 4. ICT prices and the role of competition 162 monthly consumption for fixed-broadband plans.
i e. the marginal cost of additional Internet data beyond 1 GB is still nonnegligible in many countries.
such as operators'strategies on data caps, competition in the fixed-broadband market and the ICT regulatory environment, may together be a greater determinant for fixed-broadband prices than the price difference explained by GNI
ITU. 05 10 15 20 25 GNI p. c. Fixedbroadband cap Regulation (clusters 1-3 Regulatory Tracker)% urban population Competition
(HHI)% 163 Measuring the Information Society Report 2014 of competition across countries are estimated to account for 6 per cent of the variations observed in prices.
This provides a quantitative assessment of the benefits that competition and enabling regulation can bring to fixedbroadband markets, particularly in developing countries,
but also hinge on an adequate regulatory environment in the markets. It is therefore in the hands of policymakers
and regulators to set the conditions for more affordable fixed-broadband prices based on increased competition.
Competition in the market as measured by HHI is correlated significantly to prices, and the sign indicates that increased competition reduces prices.
For example, the model predicts that in a market with two mobile-cellular operators sharing the market equally,
Competition in mobile-cellular markets is stronger than in fixed-broadband markets, and differences in competition levels across mobile-cellular markets are on average smaller.
Nevertheless, mobile-cellular markets in developing countries were concentrated on average more than in developed countries at end 2013 (mean HHI of 0. 46 and 0. 35
Chapter 4. ICT prices and the role of competition 164 According to the results of the econometric model,
if mobile-cellular markets in developing countries were to achieve the competition levels prevailing in developed countries,
but with a weaker coefficient than in the case of fixed-broadband services. The 10 per cent of countries with the lowest regulatory value are all (except one) from the developing world,
This highlights the benefits that stronger competition can have on mobilecellular prices in highly concentrated markets.
The link between competition, regulation and prices in mobile-cellular markets discussed is only valid
Urbanization is significantly related to final prices for mobile-cellular services: a 5 per cent increase in the percentage of the population in urban areas is correlated with prices 2. 7 per cent cheaper.
so that the impact of regulation and competition on prices is assessed discounting the effects of these two variables.
GNI p. c. has a weaker effect on the final price in the case of mobile-cellular services.
competition is a stronger determinant of pricing trends. Different competition levels may account for an estimated 7 per cent of the differences in mobilecellular prices observed across countries.
Taking into consideration that differences in prices are smaller than in fixed-broadband services, 56 this finding highlights the importance of competition as a driver for lower prices in mobile-cellular markets.
Regulation is found to have a weak explanatory power of only 2 per cent, suggesting that regulation is less of an issue in mobile-cellular markets.
This may be because the regulation in place in most countries (e g. regulation of mobile termination rates) already supports the development of competition in the market
since the degree of liberalization achieved in mobilecellular markets is compared high when with that prevailing in fixed-broadband markets.
and disruptive players, such as MVNOS, may enter a market with relatively low upfront capital investments,
and why light-touch regulation and a liberal spectrum assignment approach may already be conducive to competition and lower prices in mobile-cellular services,
ITU. impact of competition and regulation on fixedbroadband and mobile-cellular prices: Fixed broadband: Different regulation may account for almost 10 per cent of the differences in prices observed across countries.
Different competition levels may explain around 6 per cent of the differences in prices observed across countries.
This confirms that competition plays an important role in determining prices in fixed-broadband markets.
%02468 10 12 14 GNI p. c.%urban population Competition (HHI) Regulation (clusters 1-3 Regulatory Tracker) Chapter 4. ICT
prices and the role of competition 166 Table 4. 15: ICT Price Basket and sub-baskets, 2013 Rank Economy IPB 2013 Fixed telephone subbasket as a%of GNI per capita, 2013 Mobile-cellular subbasket as a%of GNI
per capita, 2013 Fixed Broadband subbasket as a%of GNI per capita, 2013 GNI p. c.,USD, 2013*1 Macao, China 0. 2 0. 2
ICT Price Basket and sub-baskets, 2013 (continued) Rank Economy IPB 2013 Fixed telephone subbasket as a%of GNI per capita, 2013 Mobile-cellular subbasket
or latest available year adjusted with the international inflation rates. Source: ITU. GNI p. c. and PPP$ values are based on World bank data.
and the role of competition 168 and that policy-makers and regulators may need to look at the actions that can be taken to ease capacity bottlenecks.
competition in the fixedbroadband market and the ICT regulatory environment, are together more of a determinant for fixed-broadband prices than exogenous factors,
and competition is stronger in mobile-cellular markets. Different competition levels largely explain the differences in mobile-cellular prices observed across countries (an estimated 7 per cent),
whereas differences in the regulatory environment have less of an impact in setting mobile-cellular prices,
since regulation in most countries is already open enough to allow competition. Regulatory efforts should be focused on ensuring that higher levels of competition are achieved,
particularly in those countries where dominant operators still hold market shares above 60 per cent,
thus limiting the possible benefits that competition may yield in terms of more affordable prices for customers.
Efficient spectrum allocation and assignment could allow the entry of new players or the consolidation of stronger alternative operators and thus help to spur competition in some markets,
even if penetration levels are already high. 169 Measuring the Information Society Report 2014 1 Examples of international organizations that have specific programmes in the area of income inequality include IMF (http://www. imf
in country A the same amount of USD (exchanged into national currency at market exchange rates) can buy more products or services.
For more information on the PPP methodology and data, see http://icp. worldbank. org. 3 GNI takes into account all production in the domestic economy (i e.
GDP) plus the net flows of factor income (such as rents, profits and labour income) from abroad.
CD. 4 Voice over internet services, such as Skype or Voipbuster, are excluded from the analysis in this section because they require an Internet connection
They are considered under broadband services. 5 Source: Census of India 2011. Mode of communication 2001-2011.
Available at: http://censusindia. gov. in/2011census/hlo/Data sheet/India/Communication. pdf. 6 Prices for each service are calculated on the basis of a low-user basket that defines the number of calls,
minutes and SMS (in the case of mobile-cellular plans) that are consumed per month. For more information on the baskets and the pricecollection methodology, see Annex 2. 7 Prepaid handset-based mobile-broadband plans were only available in 122 out of the 140 countries included in the comparison with the other
telecommunication services. Therefore, the average for handset-based mobile-broadband prices provides only an indication
-and-lending-groups. 11 The Communications Commission of Kenya (CCK) issued mobile virtual network operator licences to three operators in April 2014.
These data suggest there is limited competition among operators. 13 Advanced mobile technologies refer to standards agreed by the ITU Radiocommunication Assembly for next-generation mobile technologies IMT-Advanced such as
because fixed-broadband services in the island are only available to business customers, the only Internet access available to residential customers being dial-up. 15 For more details on Eircom's FTTH roll out,
see http://www. eircom. net/efibreinfo/map. 16 The most visited websites in Tunisia by December 2011 were predominantly in English.
17 For a map of the availability of Qualitynet fixed-broadband services, see http://www. qualitynet. net/map/qnetmap. htm. Endnotes Chapter 4. ICT prices
and the role of competition 170 18 Mauritel reported 7 352 fixed Internet subscriptions by end 2013,97 per cent of which trhough ADSL (source:
-con-el-modem. 25 Data for mobile-broadband services have been collected since 2012 through the ITU ICT Price Basket Questionnaire,
http://www. dot. gov. in/as/Auction%20of%20spectrum%20for3g%20&%20bwa/Auction%20results/3g auction -Final results. pdf. 29 For example, outflows of profits generated by a multinational operating
http://data. worldbank. org/about/country-classifications/country-and-lending-groups. 31 Household incomes include wages, salaries, self employment incomes, capital and property income,
Regarding mobile services, see for instance Gruber and Verboven (2001), Grzybowski (2005) and Koski and Kretschmer (2005). 42 Gruber and Verboven (2001), Gruber and Koutroumpis (2013). 43 North (1990
http://ec. europa. eu/enlargement/policy/glossary/terms/acquis en. htm. 50 The mean HHI for fixed broadband is calculated as the simple average of the HHI of 139 economies for
This includes 95 economies from the developing world and 44 from the developed world. 51 The mean value of clusters 1 to 3 of the Regulatory Tracker is calculated as the simple average of the scores of 142 economies for
which price and market share data were available for 2013. This includes 99 economies from the developing world
and 43 from the developed world. 52 http://www. itu. int/en/ITU-D/Regulatory-Market/Pages/bestpractices. aspx. 53 The Regulatory Tracker quantifies these aspects
which doubled the speeds of Home Broadband customers at no extra cost in March 2014,
http://www. omantel. om/Omanweblib/Mediacenter/Press release. aspx. 55 The mean HHI for mobile cellular is calculated as the simple average of the HHI of 140 economies for
This includes 96 economies from the developing world and 44 from the developed world. 56 The coefficient of variation of fixed-broadband prices is compared 1. 7
The information and communication technologies (ICT) sector is evolving rapidly, as are the types of service
and there is an opportunity to explore their use in order to complement the existing, but often limited, ICT data.
While existing data can provide a relatively accurate picture of the spread of telecommunication networks and services
Relatively little information, for example, is available on the demand side. While an increasing number of countries currently collect data on the individual use of ICTS, many developing countries do not produce such information (collected through household surveys
and use has been recorded in the developing economies, where ICT penetration levels have increased and where big data hold great promise for development.
in particular with regard to the different stakeholders involved in the area of big data from the ICT industry. 5. 2 Big data sources,
whose constant aim is to understand their customers, are now increasingly shifting from conventional methods, such as surveys, to the extraction of customer preferences from the analysis of big data.
New value is extracted by being able to link new information on customers to the production process in a way that enables companies to tailor
Wind turbines represent a major investment and have a typical lifespan of 20 to 30 years.
Big data have enabled the creation of a new information environment and allowed the company to manage
This reduces the cost to customers per kilowatt-hour produced, while increasing the accuracy of the customer's return-on-investment estimates.
Source: ITU, based on IBM (2012. a speed that are unprecedented. Google, for example, is running about a thousand experiments at any given point in time (Varian, 2013a.
Telecom network operators make extensive use of such techniques when rolling out new services, among other things for the purpose of pricing.
Big data from the ICT services industry are already helping to produce large-scale development insights of relevance to public policy.
daily inflation and asset-price movements. This has the advantage of providing near real-time inflation statistics that are published traditionally monthly. 179 Measuring the Information Society Report 2014 UN Global Pulse
a UN initiative to use big data for sustainable development and humanitarian action, has been mining Twitter data from Indonesia (where Twitter usage is high) 9 to understand food price crises.
followed by Better job opportunities and Freedom from discrimination. Also highly ranked, in 7th position, was phone and Internet access.
For example, the United states Federal Communications Commission (FCC) has released mobile apps that enable consumers to check their broadband quality.
Jul. 2014 Aug. 2014 Sept. 2014 An honest and responsive government Better job opportunities Freedom from discrimination A good education Political freedoms Protecting forests rivers
Household Internet penetration in developing economies is expected to reach 31 per cent by the end of 2014,
as against almost 80 per cent in developed economies. In addition as Internet penetration rates remain limited,
Given the popularity of mobile-cellular services, non-Internet-related mobilenetwork big data seems to have the widest socioeconomic coverage in the near term,
not only in developed but also in developing economies. There are various examples of how mobile phone records have been used to identify socioeconomic patterns
in particular in terms of the location and mobility information that mobile networks and services generate. Telecommunication data The mobile telecommunication data that operators possess can be classified into different types,
and duration of services used and the technology used, for example, for the mobile network (2g, 3g, etc.).
These data are potentially also very useful for building a rich profile of customers, as outlined in this section.
Since mobile user devices used to access mobile telecommunication services come with an international mobile station equipment identity (IMEI) number,
Customer details may also include a history of the services accessed, service option preferences as well as other details (as referred to in Chapter 5 Annex).
Finally, operators maintain tariff data in the form of billing records for their current and past services,
The information outlined above is used at the aggregate level to derive a range of indicators to provide operators with information on the uptake of different services
and penetration of particular services, identify market shares and monitor their business performance, as well as for reporting purposes.
and level of use of different OTT services. These data can be reported as averages (over time or for different categories of user),
which identify their most important customers on the basis of the revenue they generate for the company.
often associate revenue data with resource allocation to ensure that Qos at the base stations used by their premium customers is maintained at the highest possible level.
and benchmark countries'ICT developments, monitor the evolution of the information society and identify digital divides.
in order to improve existing services and create new ones. For operators, big data open up opportunities for better understanding of their customers,
which in turn leads to improved sales and marketing opportunities. At the same time big data can help optimize network operations
and create new revenue streams and business lines, for example when selling data. Customer profiling Telecom operators capture a range of behavioural data about their customers.
Chapter 5. The role of big data for ICT monitoring and for development 184 Customer profiles include details about customers'mobility patterns, social networks and consumption preferences.
Collectively, these digital breadcrumbs enable operators to profile and segment their customers based on a variety of metrics (Figure 5. 3). Depending on the country or region,
there may be different privacy and data regulations governing the manner in which operators may keep and/or use such data.
on the basis of usage levels (time spent and/or volume) for different VAS and OTT services.
While customer details will often enable operators to classify their customers'socioeconomic status, such details are not always very reliable.
Big data, on the other hand, can help to enhance that classification by enabling analysis of the levels of consumption of different services,
including on the basis of spending (often in relation to other services), types of device used, frequency of change of handset, and so on.
The churn rate is a measure of the number of customers leaving the network or a particular service offered by an operator.
Big data techniques can help operators understand churn better by enabling them to model the likelihood of customers leaving the network
Level of influence of customers: Operators are keen to leverage service and technology diffusion among their subscribers with a view to marketing additional,
customized services. This often calls for an understanding of the level of influence of each subscriber's social networks, both on-network (i e. within the same operator) as well as off-network (i e.
CUSTOMER INTERESTS SOCIOECONOMIC CLASS LEVEL OF INFLUENCE OF CUSTOMERS LIKELIHOOD OF CHURN MOBILITY PROFILE 185 Measuring the Information Society Report 2014 in competitor networks.
Mobile operators accord a high priority to identifying the locations most frequented by their customers, in order not only to ensure a high Qos in those areas,
but also, more recently, to build mobility profiles of their customers that can be leveraged for location-based services.
and market new services more effectively. For example, by understanding their customers'relationships to their social networks (and their relative importance within them),
operators are able to model the diffusion of services and create targeted promotions. Furthermore, social network insights can be used by an operator to market its services to the off-network contacts that are connected to its customers
or to reduce churn rates. In the Republic of korea, for example, SK Planet, a subsidiary of SK TELECOM, uses big data to help its parent company to cut churn
and generate new revenue, and has used data mining to achieve a fourfold improvement in churn forecasting.
The operator found that customers planning to quit their current package tend to use specific search phrases, such as data plan or operator benefits, at least three to seven days before taking action.
When operators suspect that customers may be looking elsewhere, they may try to keep them by providing them with a tailored offer. 18 Network planning
and details of traffic volumes, including the geospatial distribution of demand, and to plan and manage their networks more effectively through optimal resource allocation.
By utilizing geospatial information about their most active customers and high-revenue regions, operators can adapt their resource allocation to ensure that more resources are channelled into active locations.
This is an area of great significance to operators as they seek to understand the demands placed on their networks by the use of popular OTT services.
downloading applications or using value-added services are all examples of interactions for which the time, location, device,
fraud detection Social network analysis marketing Agent monitoring Enhanced credit Algorithmic liquidity needs prediction Income and poverty assessment Mapping social divides GDP estimates
through mobile data Migration monitoring Text analysis economic downturn prediction Text analysis commodity fluctuation prediction Assessment of mobility restrictions Disease containment targeting Migratory p
Chapter 5. The role of big data for ICT monitoring and for development 188 Big data for better transportation planning A data-centric approach to transportation management is already a reality in many developed economies.
and show how data-driven insights could be used to improve the planning and management of transportation services, thereby reducing congestion (Berlingerio et al.,
but outside the capital 19 days later. The circles represent the numbers of people who were displaced.
Operators may offer such specialized services (based on passive or active location data) either directly, or by providing data to third parties.
(and often the only one) in developing economies that contain behavioural information on low-income population groups Frias-Martinez et al.
used two types of mobile network data, namely subscriber communication data and airtime credit purchase records,
Poverty mapping in Côte d'ivoire using mobile network data In Côte d'ivoire, researchers used mobile network data (specifically communication patterns,
with the following map showing poor areas (in blue) in relation to the areas of high economic activity (yellow to red areas).
and identify sudden events that depress the local economy (i e. economic shocks). One of the challenges has to do with operator sensitivity regarding revenue data
By examining social communication patterns based on telecommunication data, it has become possible to obtain insights into societal structures on a scale that was previously unavailable.
The Cignifi business model is founded on the idea that Mobile phone usage is not random it is highly predictive of an individual consumer's lifestyle and risk.
and cohesion of societies in relation to socioeconomic boundaries by examining the geospatial distribution of societal ties in both developed and developing economies (Sobolevsky et al.,
In addition, the analysis of customers'mobility patterns will often allow for an understanding of important locations (work
and home being the two most important) and of the use of mobile services in rural versus urban areas.
what customers may report through a survey. Service activity and use: All subscription data could provide information as to location.
The indicators for such subscriptions could be broken further down to understand the utilization of services including voice, data and VAS over time,
services to provide additional insights. This could be done by using probabilistic analyses to match the profiles developed using data from online services with customer profiles generated from analyses of mobile-operator data.
However, as operators seek to gain a better understanding of their customers in terms of the type of content they consume (as revealed through clickstream analyses
This includes information on the use of different services and applications, intensity, frequency, and the geographic 195 Measuring the Information Society Report 2014 locations from which subscribers access ICT services and applications.
All of these insights on subscribers could potentially be further disaggregated by different demographic and socioeconomic profiles.
Given multiple SIM usage and the fact that users will in many cases be using ICT services from more than one operator or device
While the opportunities discussed above present what is analytically possible, data access and privacy considerations are nuanced complex
the creation of a semantic framework would require greater consensus among the many diverse stakeholders involved (telecom operators, network equipment manufacturers, system developers, developmental practitioners and researchers, NSOS, etc.).
whose preparation requires major investments of time. All the parties to such agreements have to address the necessary parameters as to how data are to be used,
as well as by other organizations such as LIRNEASIA, that seek to bring different stakeholders to the same table,
UN Global Pulse and others have a greater role to play in building an institutional model for data sharing and collaboration, in consultation with all stakeholders.
especially where privacy considerations preempt the use of specialized third-party cloud-based services. But as storage prices continue to fall,
all stakeholders must see tangible benefits from such data sharing. These stakeholders include not just the public and private sectors
but also, significantly, the general public, who in many cases are the primary producers of such data through their activities.
The World Economic Forum's Rethinking Personal data project has identified key trust challenges facing the personal data economy,
as well as those of private-sector stakeholders looking to protect their competitiveness. The most common approach to addressing this issue has been based the rights approach.
mainly because the levels of‘datafication'in developing economies are still quite low. Where mobile-phone records are concerned,
with minimal (if any) associated registration Information security imperatives have prompted increasingly governments to require registration information, even for prepaid customers (GSMA, 2013b),
the World Economic Forum (WEF) initiated a global multi-stakeholder dialogue on personal data that advocated a principle-based approach,
This does still require the confluence of appropriate stakeholders. But as UN Global Pulse suggests,
almost two-thirds of prepaid customers generally chose to recharge using scratch cards. Higher denomination scratch cards were not as readily available as those with lower denominations.
As Google's Chief Economist, Hal Varian, notes, there are often more police in precincts with high crime,
The behavioural economist Sendhil Mullainathan notes that inductive science (i e. the algorithmic mining of big data sources) will not drown out traditional deductive science (i e. hypothesis testing), even in a big data paradigm.
Telecom network operators themselves use such techniques when rolling out new services or, for that matter, for pricing purposes.
In a recent global survey of NSOS from 200 economies, conducted by UNSC, respondents identified the development and 203 Measuring the Information Society Report 2014 retention of staff with the necessary skills as one of their main challenges,
Currently, there is a mismatch between the supply of and demand for talented individuals with the requisite broader skill sets,
Mckinsey predicts that by 2018 the demand for data-savvy managers and analysts in the United states will amount to 450 000,
) This suggests that organizations wishing to leverage big data for development will face competition from the private sector
have a shortage of advanced analytical skills by comparison with developed economies. Until such time as systematic capacity development yields proper rewards, it will remain essential to import skills from outside (both local and international),
Very limited information is available on opportunities for using big data to complement official ICT statistics.
and to initiate a dialogue to identify opportunities and understand needs and constraints. Since many of the big data sources lie within the private sector
They are placed well to develop a Chapter 5. The role of big data for ICT monitoring and for development 204 privacy framework, in consultation with other stakeholders.
Governments Governments have different opportunities and different roles to play in the exploitation of big data for monitoring and development.
To this end, national regulatory authorities (NRAS) and NSOS, in consultation with other national stakeholders, are placed best to lead the corresponding discussions
and bring together the relevant stakeholders. In particular, NSOS, given their legal mandate to collect and disseminate official statistics
Fostering big data competition and openness: Regulators could foster big data competition in increasingly concentrated big data markets,
including by ensuring that data holders allow others to access their data under fair and reasonable terms. 205 Measuring the Information Society Report 2014 International stakeholders International stakeholders including UN AGENCIES and initiatives (such as
ITU and UN Global Pulse), the Partnership on Measuring ICT for Development, ICT industry associations and producers of big data (Google, Facebook, etc.)
and examine the challenges and opportunities related to big data in the ICT sector. To this end, the key international stakeholders have to work together to facilitate the global discussion on the use of big data.
UN Global Pulse, as one of the main UN initiatives exploring the use of big data,
could be formed to explore new opportunities and address challenges, including in the area of international data comparability and standards.
This makes them important stakeholders in defining the state of the art with respect to leveraging big data for development. They, more than others, have been the first to engage with telecommunication operators with a view to using their data for development.
These can be analysed to understand subscriber demand for data at both an individual level and at aggregate levels,
and understand the demand for particular applications and websites. Service access detail records Whenever a user utilizes a telecommunication service,
in addition to which they can be used to build a rich profile of customers, as outlined in Section 5. 3. Chapter 5. The role of big data for ICT monitoring
and/or to a business case for providing location-based services. The large-scale capture of such higher-resolution data is undertaken mainly by operators in developed economies.
Operators in developing economies use some of these methods, but often on a case-by-case basis,
and not for their entire subscriber base. 43 However, this trend is currently changing, and an increasing number of regulators are
an azimuth (i e. antenna orientation information) and an angular tilt. 45 It is also possible to obtain such data in real time through data-mediation services,
Device characteristics All mobile user devices used to access mobile telecommunication services come with an international mobile station equipment identity (IMEI) number.
telecommunication services. In addition to serving as a unique serial number for the handset, parts of it can reveal information on the handset make and model, type of technology (e g. 2g, 3g, LTE),
when services were activated and/or deactivated, specific service option preferences and the current account status, current international mobile subscriber identity47 (IMSI) number associated with the customer's mobile number,
and billing records for their current and past services. This information which associates a customer with his/her usage patterns
but also for individual customers. Mobile operators can associate such data with traffic data to understand the revenue that is being generated by specific network elements (e g. base stations),
which acknowledges that Big data represents new opportunities and challenges for Official Statistics, and which encourages the European Statistical System
/13 Mobile phone records have been used to infer locations of economic activity within, and patterns of migration to, slum areas in Kenya (Wesolowski and Eagle, 2010) and internal migration in Rwanda (Joshua E. Blumenstock, 2012).
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the new Unified License that applies to all Indian operators requires mobile operators to include location details of mobile customers in the CDRS.
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voice services using Internet Protocol (IP) delivered over fixed (wired)- broadband infrastructure (e g. DSL fibre optic), and voice services provided over coaxial-cable television networks (cable modem.
It also includes fixed wireless local loop (WLL) connections, which are defined as services provided by licensed fixed-line telephone operators that provide last-mile access to the subscriber using radio technology,
when the call is routed then over a fixed-line telephone network (and not a mobilecellular network).
) It includes all mobile-cellular subscriptions that offer voice communications. It excludes subscriptions via data cards or USB modems, subscriptions to public mobile data services,
private trunked mobile radio, telepoint, radio paging and telemetry services. 3. International Internet bandwidth (bit/s) per Internet user International Internet bandwidth refers to the total used capacity of international Internet bandwidth,
in megabits per second (Mbit/s). It is measured as the sum of used capacity of all Internet exchanges offering international bandwidth.
It provides access to a number of communication services, including the World wide web, and carries e-mail, news, entertainment and data files,
and broadband-overpowerline (BPL) communications). Subscriptions with access to data communications (including the Internet) via mobile-cellular networks are excluded. 3. Wireless-broadband subscriptions per 100 inhabitants Wireless-broadband subscriptions refers to the sum of satellite broadband, terrestrial fixed
Dedicated mobile-broadband data subscriptions refers to subscriptions to dedicated data services (over a mobile network) that allow access to the greater Internet
and which are purchased separately from voice services, either as a standalone service (e g. using a data card such as a USB modem/dongle) or as an add-on data package to voice services
which requires an additional subscription. All dedicated mobile-broadband subscriptions with recurring subscription fees are included regardless of actual use.
and usage are correlated both with national income, hot-deck imputation was chosen as the method for imputing the missing data,
or the latest available year adjusted with the international inflation rates. Prices for 2008,2009, 2010,2011 and 2012,
or to existing customers, etc.).8. Local calls refer to those made on the same fixed network (on-net) within the same exchange area. 9. Peak is the busiest time of the day, usually during working hours of weekdays.
With convergence, operators are increasingly providing multiple (bundled) services, such as voice telephony, Internet access and television reception, over their networks.
then the additional services that are included in the price are specified in a note. Source: ITU.
per month (50 on-net, 50 off-net) available to all customers. In countries where no prepaid offers are available, the monthly fixed cost (minus the free minutes of calls included,
or to existing customers, etc.).9. With convergence, operators are increasingly providing multiple (bundled) services such as voice telephony, Internet access and television reception over their networks.
They often bundle these offers into a single subscription. This can present a challenge for price data collection,
then the additional services that are included in the price plan should be specified in a note. 10.
if it can be used for other services as well. If a monthly rental for the physical line is required not (e g. naked DSL),
covering prepaid and postpaid services, and supported by different devices (handset and computer), mobile-broadband prices were collected for two different data thresholds,
The guiding idea is to base each plan on what customers would and could purchase given the data allowance and validity of each respective plan.
b) there is no offer available for a specific sub-basket. 7. Prices should be collected for prepaid and postpaid services, for both handset and computer-based plans.
Preference should be given to packages that are bundled not (with voice services, for example. If the plan chosen includes other services besides mobile-broadband access,
these should be specified in a note. 15. Prices refer to a regular (non-promotional) plan
Customers can then pay an excess usage charge in order to continue to have full speed connections. In some cases, even throttled speeds are considered still broadband (i e. equal to, or greater than
In the 2013 revision, EGTI agreed that ITU should collect prepaid and postpaid prices, for both handset-and computer-based services, with the following volume allowances:
with Internet access Economy 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 1 Afghanistan 0. 3 0. 3 65.5 70.0
Economy 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 84 Lao P. D. R.
Economy 2012 2013 2012 2013 2012 2013 1 Afghanistan 5. 5 5. 9 0. 0 0. 0 0. 4 1
Society Report 2014 Percentage of individuals using the Internet Fixed (wired)- broadband subscriptions per 100 inhabitants Wireless-broadband subscriptions per 100 inhabitants Economy 2012 2013 2012
Annex 3. Statistical tables of indicators used to compute de IDI 246 Skills indicators Gross enrolment ratio Adult Seconday Tertiary literacy rate Economy 2012 2013
literacy rate Economy 2012 2013 2012 2013 2012 2013 84 Lao P. D. R. 46.5 46.5 16.7 16.7 72.7 72.7
Mobile-cellular subscriptions per 100 inhabitants, 2012: 1) Numbers are down due to data cleanse. 2) ACMA Communications Report 2011-12.2) incl. payphone, excl.
voice or data communication in the last month. 5) By December 2013.6) Incl. all mobile cellular subscriptions that offer voice communications,
or equal to, 512 Kbps. 15) Rightel (Tamin Telecom) has been given license to operate 3g services and started services from February 2011 (http://www. rightel. ir/).
/Data refer to the sum of fixed wireless broadband and active mobilebroadband subscriptions. 16) Incl. mobile broadband
2013.18) Incl. mobile broadband and Wimax. 19) Estimate based on 1. Standard mobile subscriptions using data services 2. Dedicated data subscriptions 3. Add on data
Definitive data (annual report) may change because quarterly reports use a smaller sample of operators than annual report. 26) Wireless Broadband services are not being offered in St vincent as yet.
We anticipate that Mobile broadband and terrestrial fixed broadband services would be in place by the end of 2014.27) OFCOM estimate. 28) Includes:
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