- The price of telecommunication and Internet services is regularly cited as one of major barriers to Internet access and usage. Monitoring prices is very difficult, as prices depend on: type of service (fixed versus mobile); bundling of different services; different operators (within the same market); data, voice and text allowances; and whether national or international comparisons are made.
- There is evidence to suggest that affordability or the ability of individuals or households to pay for telecom services relative to their disposable income is one of the main barriers that affect consumer consumption of Internet services. Affordability depends not only on both price and income, but also on other, competing spending choices available.
- Globally, prices for voice and data services have been falling over the last decade, in line with growing competition and strong increases in subscriber rates and usage.
- ITU is the official source for global ICT data and statistics, including ICT price data. ITU has the responsibility for collection and reporting of global and national official telecommunication statistics as well as statistics for ICT household access and individual ICT use within the UN system. ITU works with other international organizations (e.g. the World Bank and OECD) to ensure the accuracy and international comparability of these data. ITU was a founding member of the Partnership on Measuring ICT for Development.
- ITU monitors price data from ITU Member States via an annual survey, which are disseminated in the World Telecommunication/ICT Indicators Database and the ITU Yearbook of Statistics.
- ITU also tracks the Connect 2030 Agenda, a set of indicators agreed by ITU membership, which includes affordability indicators and targets.
Defining price versus affordability
Defining the 'affordability' of telecom services can be very hard. This question can be answered statistically in different ways, depending on whether we examine:
Direct comparisons between different operators in a single country or over time. Prices can vary due to: contract length; volume of minutes; texts and data allowances; and whether a handset is included.
International comparisons: may require adjustments for exchange rates and purchasing power parity between different countries.
Standardized price baskets can be used to compare prices between operators and/or countries. Prices significantly influence the profitability of mobile operators, and their ability to survive, upgrade and reinvest in networks. Prices for initial service launches may be high ('premium pricing'), but usually fall as services are rolled out across larger subscriber bases (sometimes due to 'economies of scale' or 'predatory pricing'), sometimes resulting in lower prices for larger operators, with larger subscriber bases.
The 'price' of telecom/ICT services is often cited as a barrier to using telecom services, but there is evidence that what really matters is the 'affordability' or ease of purchasing a service, relative to consumer income. Prices can be expressed as a percentage of Gross National Income (GNI) per capita to show prices relative to the size of the economy of each country, thus pointing to the affordability of each ICT service at country level. Such national averages may not indicate that ICT services are affordable for poorer social classes, or any particular household or individual, but they still give insights into whether telecom services are affordable.
ITU has defined a number of price baskets:
Baskets provide a helpful standard benchmark for comparisons, but they have some drawbacks: there are many other packages available to consumers; they may not take account of the evolving consumer behavior over time; and they use a 'weighted average' price, irrespective of number of subscribers that use it.
For affordability, ITU monitors countries where low-consumption data and telecom services are
affordable. There is still a small number of countries where data and telecom services are relatively
unaffordable, costing above 10% of GNI per capita.