Broadband costing and pricing – The case
of Sao Tome and Principe
ITU-D Regional Economic and Financial Forum of
Telecommunications / ICTs for Africa
Emery d’Alva
Marketing and Business Development Director at CST
Hotel Praia, Sao Tome and Principe, 03 Feb 2015
Summary
Understanding the santomean context
Small country, small market, big problems
The challenge of satisfying customers with high tech in a low income market
From B
B.C
C to A
A.C
C period on broadband services
Bridging the digital divide and state of the art technology
A new era on broadband costing and pricing
2
Understanding the santomean market
3
Understanding the santomean context
Small country,
y, small market,, big
g problems
p
Country overview
2 small islands
1,001 Km2
187,000 inhabitants
50% less than 20 years old
1,134 € GDP per capita
Agriculture and Tourism as main economic activities
GDP grows 5% annually
Telecom represents 7% of GDP
4
Understanding the santomean context
Small country,
y, small market,, big
g problems
p
Telecom market overview
2 operators - CST and Unitel
CST is 51% owned by Portugal Telecom and 49% owned by Santomean Government
15,000,000 € market
CST’s estimated market share: 10%
146,201 mobile phone users FY 2014 (CST)
6 700 fixed lines FY 2014 (CST)
6,700
25,000 internet users jan 2015 (CST)
13% penetration on internet
3G network covering 90% of the population
and 80% of the territory
5
Understanding the santomean context
Small country,
y, small market,, big
g problems
p
Smalls islands specific costs
São Tome and Príncipe geography
Rain
Power network
Mountains and trees
Import – export costs
Higher supply costs
Higher power costs
6
Understanding the santomean context
Satisfying
y g customers with high
g tech in a low income market
People desire the same things they see in developed economies
2 operators - CST and Unitel
Mobile broadband
Fiber to the home and IPTV
VoIP
Fast downloads
Flat tariffs
Last Apple and Samsung smartphones
Corporate offer
7
Understanding the santomean context
Satisfying
y g customers with high
g tech in a low income market
PIB/Capita
EUR
8,201
,
7,342
6,219
4,513
3 960
3,960
2,859
3.043
+168%
389
Togo
567
Benin
818
Cote
d’Ivoire
1,134
1,147
STP
Nigéria
1,177
1,230
Ghana Cameroun
Congo
Angola
Namíbia
South
Africa
Botswana
Gabon
8
Understanding the santomean context
Satisfying
y g customers with high
g tech in a low income market
Voice price On-Net
EUR cent./min
SMS price
EUR cent
24.0
Cabo Verde
23.2
South Africa
17.6
Angola
14.2
Gabão
Minimum top up
EUR
8.9
Cabo Verde
7.3
Angola
Angola
6.5
Cameroun
South Africa
6.4
Nigéria
13.6
Cote d’Ivoire
Botswana
13.4
Togo
Cote d’Ivoire
13.0
Sao Tome and Principe
Congo
12.8
Benin
6.2
4.9
4.3
3.8
Namíbia
0.6
Congo
0.6
Gabon
0.6
T
Togo
05
0.5
N íbi
Namíbia
Namíbia
11.2
Gabon
3.3
Soth Africa
Congo
3.2
Cote d’Ivoire
Nigéria
8.9
Botswana
Benin
8.6
Nigéria
Ghana
4.1
Ghana
13,3
2.8
2.5
1.6
0.5
0.3
Ghana
0.2
Sao Tome and Principe
0.2
Benin
4,7
0.9
0.7
11 4
11.4
10.2
1.1
Cabo Verde
C
Cameroun
Sao Tome and Principe
36
3.6
2.0
Botswana
Cameroun
Togo
5,3
0.2
1,0
9
From B.C.
B C to A.C.
A C period on broadband services
10
From B.C to A.C period on broadband services
Bridging
g g the digital
g
divide and state of the art technology
gy
11
From B.C to A.C period on broadband services
Bridging
g g the digital
g
divide and state of the art technology
gy
- 96% on internet on the phone MB price, 22.8
22 8 x
less than 2 years ago without any “regulatory push”
Very fast adoption of smartphones
Fiber to the home is beeing replacing DSL
for the same price
Selected clients are experiencing IPTV pilot
New business are appearing thanks to better
customers
t
experience
i
12
From B.C to A.C period on broadband services
A new era on broadband costing
g and p
pricing
g
Internet price / month
42€
Broadband equipment becomes free
Customers get back the money they spend buying CST’s
broadband mobile equipments by receiving additional MB
to use on internet
5x
cheaper
8.16€
Before Submarine Cable
After Submarine Cable
13
From B.C to A.C period on broadband services
A new era on broadband costing
g and p
pricing
g
GB included in minimum speed
Max internet speed (fiber to the home)
100 Mbps
12 GB
12
100
80
8
3x
50 x
faster
60
4
4 GB
40
20
2 Mbps
0
0
ADSL 128 Kbps Æ ADSL 1 Mbps
Before Cable
After cable
8 x faster
14
From B.C to A.C period on broadband services
A new era on broadband costing
g and p
pricing
g
# internet users
Used international bandwidth
30000
775 Mbps
800
+67%
600
13%
+239%
239%
5.7 x
more
15000
15.5
15
5x
higher
400
8 57%
8,57%
200
50 Mbps
2 57%
2,57%
0
0
2012
1
2013
2014
Before Cable
After cable
Percentage in the bars refers to penetration rate: # internet users per 100 inhabitants
15
Thank you
Merci
Obrigado
emerydalva@cst.st