Composition and evolution of ICT
price baskets in Africa
ITU Indicator Workshop
Addis Ababa
October 2015
1
Intro
‣ Evolution: From baskets to bundles
‣ Pricing in the African context is unique
‣ How do we capture data in a dynamic market?
‣ Enter: RAMP - RIA Africa Mobile Pricing Index
•
46 African countries •
Updated quarterly
2
RAMP - RIA Africa Mobile Pricing
Index
1. Africa Prepaid Pricing Index
1. Baskets - Origin
2. Changes
2. Bundled Value Index
1. Market Evolution
3. Postpaid Value Index
4. Mobile Broadband (Data) Value Index
3
1 - Africa Prepaid Pricing Index
4
OECD (2010) Mobile Basket
Methodology
40 calls/60 SMS prepaid monthly
‣ Pricing products for baskets of minutes and
SMS
‣ At least two largest mobile operators based on
subscribers numbers
•
The operators covered should have between them at
least 50% market share
‣ Cheapest products for country comparison
5
Basket Methodology Weaknesses
‣ Baskets do not reflect the most popular
package but the cheapest product
‣ The same basket is used for all operators: offnet/on-net ratio depends on market share
‣ Only the two largest mobile operators - new
entrants and small operators are likely to be
price challengers
6
Expanding OECD Methodology to
all operators and all products in a
country
Comparing
Countries
OECD Basket
Methodology
Comparing
Operators
Comparing
Products
7
Comparing countries
Comparing cheapest product available from
dominant operators
cheapest operator
most expensive operator
Comparing the difference between
cheapest in country - cheapest from dominant operators
cheapest in country - cheapest from most expensive
operator
Benchmarking
8
Cheapest Prepaid product in country in US$
Q2 2014
Dominant operator
Egypt
Ghana
Sudan
Ethiopia
Mauritius
Kenya
Rwanda
Tunisia
Algeria
Libya
South Africa
Nigeria
Uganda
Sierra Leone
Namibia
Mozambique
Botswana
Benin
2.57
2.73
2.83
3.9
4.05
4.26
5.06
5.91
6.33
7
7.18
7.2
8.44
9.26
9.43
10.13
11.14
11.37
Egypt
Ghana
Sudan
Ethiopia
Mauritius
Kenya
Rwanda
Tunisia
Algeria
Libya
South Africa
Nigeria
Uganda
Sierra Leone
Namibia
Mozambique
Botswana
Benin
Cheapest operator
1.61
2.13
1.06
3.9
4.05
1.46
5.06
5.73
6.33
7
4.97
4.54
7.02
9.26
8.24
10.13
10.15
11.37
9
Alternative comparisons
Cheapest dominant operator in Africa in USD
Cheapest dominant operator in South Africa in USD
SA Dominant Operator Rank
28
25
26
28
27
28
29
28
26
23
23
21
14
14
14
7.6
7.5
7.8
7.7
7.4
3.4
3.3
3.3
3.0
3.0
2.6
2.3
2.3
2.3
1.7
1.7
1.6
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Q3 2014
Q4 2014
Q1 2015
Q2 2015
13
Q2 2013
12.4 11.7
11.1 10.9
10.2
Q1 2013
3.8
16
Q4 2012
3.8
Q2 2012
3.9
18
Q3 2012
15.0 15.6 14.9 14.6
13.9
Q1 2012
3.5
Q3 2011
3.8
Q2 2011
3.8
Q1 2011
Q4 2010
3.8
19
Q4 2011
17.5 17.3 17.8 17.0
Prices have remained the same in local currency for cheapest dominant Africa (Safaricom
Kenya) and South Africa (MTN)
African Prepaid Pricing Index
SA operators rank lowly on the index when compared to other african markets
Algeria and have introduced new cheaper products pushing down S.A’s rank
Prepaid Pricing
Methodology
12
13
The Bundled Value Index
(BVI)
14
New bundle offerings
Need for additional data (ARPU/MoU) to create new baskets
15
Bundle Value Index
BVI looks at bundles that include voice or sms and
data
Bundled Value Index
Products increase in Q2 2015
New pricing strategy for all operators in country except
for SA, Kenya and Ghana
Airtel Tanzania best performing in Q1 2015 toppled by
Orange Kenya Q2 2015
South African products closer to bottom of the rank
Ethiopia ranks quite low in terms of value compared to
other operators (Q2 2015)
Airtel Tanzania
79.71
Sudani
73.31
ZanTel
57.62
MTC
43.23
Tigo Ghana
39.38
Airtel Madagascar
25.80
Airtel Kenya
19.42
Telma
18.38
Airtel Uganda
18.02
Vodacom Tanzania
17.74
Orange Senegal
MTN South Africa
15.94
14.84
Orange Madagascar
13.00
Tigo Tanzania
12.74
Orange Africell Uganda
12.16
Movicel
11.23
Cell C
9.79
MTN Uganda
5.76
EthioTelecom
2.85
TN Mobile
2.26
Q1 2015 BVI
best operator
Orange Kenya
CV Movel
Unitel (ex T-Mais Cape Verde)
Yu Kenya
Airtel Ghana
Zanzibar Telecom Limited
Smart Uganda
Airtel Tanzania
Tigo Tanzania
Sudani
Uganda Telecom
MTC
Smart Tanzania
Vodafone Ghana
Tigo Ghana
Tigo Senegal
Etisalat Egypt
Inwi
Airtel Madagascar
Orange Senegal
Airtel Kenya
Vodacom Tanzania
Telma
Movitel Mozambique
Airtel Uganda
Orange Madagascar
MTN Cameroon
Vodafone Egypt
MTN South Africa
Orange Africell Uganda
Movicel
Mobilis
Cell C
Orange Cameroon
Tigo
MTN Uganda
Orange Botswana
MTN Nigeria
Libertis (Gabon Telecom)
Ethio Telco
TN Mobile
259.7
197.1
197.1
171.9
144.9
115.7
107.3
89.9
87.2
73.4
61.7
58.5
56.0
53.9
46.0
43.9
38.3
33.5
28.5
26.6
20.2
20.0
19.7
19.4
19.1
18.7
18.2
18.2
13.6
12.9
11.9
10.1
10.1
6.9
6.2
6.1
5.8
4.5
3.9
2.9
2.3
Q2 2015 BVI
best operator
RIA’s Mobile Broadband
Pricing Index
19
Prepaid Broadband Baskets
‣ Prepaid mobile broadband data bundles
•
1GB baskets
•
1MB baskets - outdated
•
1 Day baskets, 1 week - uncapped data bundles valid
for at least 8 hours of one day - converted to one month
20
Prepaid data market - Q2 2015
Increased countries we collect in Q2 2015 from 21 to 36
african countries
Rwanda’s Tigo cheapest dominant operator 1GB price at
USD4.39
Tanzania Zantel cheapest operator 1GB price
Swaziland most expensive product offering on the 1GB
price assessment
Ethio Telecom is relatively cheap in terms of data in Q2
2015
Cheapest 1GB price USD
Dominant operator in country
Rwanda
Mozambique
Tunisia
Tanzania
Madagascar
Niger
Senegal
Burkina Faso
Kenya
Ghana
Sao Tome and Principe
Ethiopia
Benin
Algeria
Malawi
Uganda
Liberia
South Africa
Mali
Mali
Namibia
Nigeria
Togo
Chad
Cote d'Ivoire
Zambia
Cameroon
Gabon
Sierra Leone
Sudan
Angola
Lesotho
Bostwana
Zimbabwe
Swaziland
4.4
4.4
5.2
1GB price USD
Cheapest operator in country
Tanzania
Kenya
Rwanda
8.0
Mozambique
Ghana
8.1
Tunesia
8.4
Sudan
8.4
Mauritius
8.4
Malawi
9.0
South Africa
9.1
Niger
9.1
Togo
9.8
Senegal
10.1
Burkina Faso
10.2
Nigeria
10.6
Sao Tome and Principe
11.6
Uganda
12.0
Ethiopia
12.3
Benin
12.6
Algeria
12.6
Liberia
13.2
Mali
16.7
Mali
16.9
Namibia
16.9
Cameroon
16.9
Madagascar
18.0
Lesotho
20.2
Zambia
23.6
Gabon
24.0
Chad
24.4
Cote d'Ivoire
Angola
24.4
Sierra Leone
27.3
Bostwana
30.9
Zimbabwe
35.0
Swaziland
37.7
3.8
4.3
4.4
4.4
4.5
5.2
5.8
7.3
8.1
8.2
8.4
8.4
8.4
8.4
9.1
9.1
9.3
9.8
10.1
10.2
12.0
12.6
12.6
13.2
13.5
14.6
14.9
16.5
16.9
16.9
16.9
22.6
24.0
28.3
30.0
37.7
Value for Money Index Discontinued
23
Download/Upload speed kbps
Average Combined kbps
Average Download kbps
Average Upload kbps
Safaricom
Telecom Namibia Mobile
Vodacom South Africa
MTC
Smile Nigeria
Smile Tanzania
MTN Uganda
Vodacom Mozambique
MTN Nigeria
CellC
Smile Uganda
Airtel Ghana
Orange Kenya
MTN South Africa
Vodafone Ghana
Tigo Rwanda
Orange Uganda
Mascom
Airrtel Rwanda
MTN Rwanda
Vodacom Tanzania
Source: www.ookla.com
Orange Botswana
Airtel Uganda
Airtel Nigeria
Glo Mobile Ghana
0
10000
20000
30000
40000
50000
60000
24
0
Orange Botswana
Glo Mobile Ghana
Airtel Nigeria
Airtel Uganda
Mascom Botswana
Tigo Rwanda
Airtel Rwanda
MTN Rwanda
Vodacom Tanzania
Orange Uganda
MTN SA
MTN Nigeria
Vodafone Ghana
Airtel Ghana
Smile Uganda
acom Mozambique
MTN Namibia
Orange Kenya
Cell C SA
MTN Uganda
TN Mobile Namibia
Smile Tanzania
Smile Nigeria
Vodacom SA
Safaricom Kenya
Q1 2014 - Value for money index
Combined average speed in kbps/1GB price in USD
1600
1200
800
400
25
Postpaid Value Index (PVI)
26
The Postpaid Value Index
Postpaid makes up a fairly small share of the
mobile market in Africa
The index only takes into account the top 12
economies with the highest share of postpaid
Benchmarking within country (between
operators) is just as important as
benchmarking between countries
27
The Postpaid Value Index
28
Applied Example: South Africa
29
What do we do with all this
information?
Policy example
30
South Africa - Decline in MTR’s
Cost of cheapest prepaid mobile product for OECD 40
calls/60 SMSs basket by operators in ZAR
Telkom Mobile
Virgin Mobile
Cell C
Vodacom South Africa
MTN South Africa
Amendment MTR
20c, asymmetry
44c
180
135
90
45
MTR 40c
Q2 2014
Q1 2014
Q4 2013
Q3 2013
Q2 2013
Q1 2013
Q4 2012
Q3 2012
Q2 2012
Q1 2012
Q4 2011
Q3 2011
Q2 2011
Q1 2011
Q4 2010
0
31
Summary
Aim is to protect the interest of the consumer
For data to inform policy
Collection is the easy part - All states should
be doing this
Data has to be carefully analyzed and
understood in context of financial information
and other supply and demand side indicator
Continuously evolving market - indicators
must evolve to keep up
32