Measuring Digital Developments: ICT Price Trends in Pakistan

ICT Price Trends scrutinizes the affordability of ICT services by examining and comparing the cost of mobile-voice services, mobile data, and fixed broadband. The ICT price benchmark methodology was amended in 2017. Therefore this is the first time we are publishing results for the combined data-and-voice baskets launched after the 2017 revision. These new outcomes highlight the effect of the bundling of services on consumer prices.

The article also explains the affordability gap among the core and periphery countries that is, the difference in costs when these are compared with countries’ gross national income (GNI) levels. It also shares data on countries’ progress towards attaining the United Nations Broadband Commission for Sustainable Development target for 2025. The 2025 goal entails that entry-level broadband services must be made affordable in developing countries at a level corresponding to less than 2% of monthly GNI per capita.

Conclusively, the report shows that average prices are broadly continuing to face a decline however it also confirms that broadband services can still be too costly for the poorest consumers, especially in countries with
a low GNI per capita such as Pakistan.

High Consumption Mobile-Data and Voice-Basket:

Under this, Pakistan is ranked on 91st spot. The high consumption mobile data and voice basket can be purchased for 2.9% of the GNI which is further equal to 3.78 USD. In terms of purchasing power parity (PPP), it is equal to $13.72. The monthly voice call allowance and monthly SMS allowance is equivalent to 2000 minutes and the same number of SMS. While the monthly data allowance is equivalent to 2 GB.

Low Consumption Mobile-data-and-Voice Basket:

For the low-consumption mobile-data-and-voice baskets that are the data-and-voice baskets proffering at least 70 minutes of voice communication, 20 SMSs, and 500 MB of data. Under this, Pakistan is ranked on the 95th spot. Low consumption mobile data and voice basket can be purchased for 2.4% of the GNI which is further equal to 3.20 USD. In terms of purchasing power parity (PPP), it is equal to $11.63. The monthly voice call allowance and monthly SMS allowance is equivalent to 10,000 minutes, and the same number of SMS. While the monthly data allowance is equivalent to 1 GB.

The data-and-voice price baskets:

The low-consumption data-and-voice price basket is based on a monthly data usage of a minimum of 500 MB of data, 70 voice minutes, and 20 SMSs. The high-consumption data-and-voice price basket is based on a monthly data usage of a minimum of 1.5 GB, 140 minutes, and 70 SMSs. For plans that limit the monthly amount of data transferred by including data volume caps below 500 MB (low-consumption) or 1.5 GB (high-consumption), the cost of the additional bytes is added to the basket. The minimum speed of a broadband connection is 256 kbit/s. The data-and-voice basket is based on the most common contract modality (prepaid or postpaid) in the economy
in question, i.e. if more than 50 per cent of subscriptions are prepaid, then prepaid is selected. Otherwise, a postpaid plan is selected.

Global trends (Mobile Voice Basket):

From 2008 to 2019, the global average cost  of a mobile-voice basket fell from USD 21.4 to USD 11.8, equivalentto a CAGR of -5.3%. Growth rates for the period 2008-2019 must be analyzed with prudence, as there is a break in series between 2017 and 2018. As the growth rates for 2009-2017 are the same as the growth rates for 2008-2019, it is assumed that the influence of the change in the basket is insignificant, and growth rates are therefore reported nevertheless. Over the same period, mobile-voice penetration rose from 60 to 109 subscriptions per 100 inhabitants, a CAGR of 5.5 percent.

Mobile Voice Basket in Pakistan:

In terms of mobile voice basket, Pakistan is placed at the 80th position. The mobile voice basket can be bought for 1.2% of the GNI which is equal to 1.54 USD. The purchasing power parity is equal to $5.59  However, there is no tax rate on the mobile voice basket.

Global Trends (Mobile Data Basket):

The global average price of a mobile-data basket of at least 1.5 GB dropped from USD 20.4 in
2013 to USD 13.2 in 2019, equivalent to a CAGR of -7 per cent – driven mostly by the 2013 to 2015
sub-period, followed by relative stability over the past four years .10 Over the past six years, there has
been an explosion in the number of active mobile-data subscriptions, increasing from 27.4 to 83 per
100 inhabitants, or a CAGR of 20.3 per cent.

Mobile Data Basket in Pakistan:

In terms of Mobile Data Basket, Pakistan is ranked on the 37th spot. The mobile data basket can be purchased for 0.7% of the GNI which is further equal to 0.99 USD. In terms of purchasing power parity (PPP), it is equal to $3.58. The monthly data allowance is equivalent to 4.9 GB while there is 0% tax imposed on it.

Fixed Broadband Basket:

The fixed-broadband basket refers to the price of a monthly subscription to an entry-level fixedbroadband plan. For comparability reasons, the fixed-broadband basket is based on a monthly data usage of a minimum of 5 GB. For plans that limit the monthly amount of data transferred by including data volume caps below 5 GB, the cost for the additional bytes is added to the basket. The minimum speed of a broadband connection is 256 kbit/s.

Globla Trends (fixed broadband basket):

There has been a steady growth in the penetration rate of fixed-broadband subscriptions, with just over six subscriptions per 100 inhabitants in 2008 increasing to almost 15 in 2019, a CAGR of 8.5 per cent.During the same period, the average price of an entry-level fixed-broadband basket, converted into USD using market exchange rates, decreased from USD 44 to USD 27, equal to a CAGR of -4.4 per cent over this period. Interestingly, prices levelled out and in fact increased slightly from 2016 onwards, but this small increase in average price does not seem to have influenced the global average fixed-broadband subscription rate, which has continued to rise.

Fixed Broadband Basket in Pakistan:

Under this, Pakistan is ranked on the 138th spot. The fixed broadband basket can be purchased for 10.6% of the GNI which is further equal to 13.95 USD. In terms of purchasing power parity (PPP), it is equal to $50.69. The average speed it provides is equal to 4MB/s while you can enjoy unlimited volume. There is no tax imposed on the fixed broadband basket.

Conclusion:

According to this report, on average, mobile-voice, mobile-data and fixed-broadband prices are falling gradually around the globe, and in few countries even at a fast rate. The reduction in price as compared to income is even more dramatic, implying that  telecommunication/ICT services are becoming cheaper.

Though, this trend in annual average prices is not uniform for all countries. In addition to that, falling prices are not tranformed into increasing Internet penetration rates, especially in Least Developing Countries LDCs, indicating that affordability may not be the only barrier to Internet uptake.

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