As part of our “Mobile Research at Your Desk” series, this week we present a white paper written by Hernán Galperin in collaboration with the Diálogo Regional sobre la Sociedad de la Información (DIRSI) and International Development Research Centre (IDRC). He attempts to shed some light on the affordability of mobile phones between Latin American and Caribbean countries and compare tariffs with the rest of the world.
Recognizing that developing a single standardized metric for mobile affordability is a challenge, the author used a well-established OECD method - a basket of services - to estimate the cost of a set of mobile services specified for low-volume users.
The data exposes the reality of mobile affordability for the bottom of the pyramid.
Hernán Galperin offers a quantitative analysis using a sound approach to predict affordability of mobile tariffs. In the report, it is acknowledged that price of handsets or connection charges are not accounted for, and it is clarified that per-minute calculation can result in an over-estimation of cost.
In another report, Galperin and colleague Judith Mariscal share mobile opportunities informed by survey results of 7,000 individuals in low income households. Discussed there are perceptions of mobile service costs, and patterns of mobile usage, and both reasons for and barriers to mobile adoption. With colleague Roxana Barrantes, Galperin demonstrates the relationship between costs of mobile services and mobile penetration and discusses the savings incurred by low income users with micro-prepayment and per-second billing schemes.
All three papers can be accessed in our mDirectory for your reading.
MobileActive.org's content license is here. Please note that some materials in this slidecast may be separately copyrighted by the respective authors of the papers we presented. Images and materials are used here with the author's permission.
Can the Poor Afford Mobile Telephony? Evidence from Latin America data sheet 1960 Views
Author:
Roxanna Barrantes and Hernán Galperin
Publication Date:
Jan 2008
Publication Type:
Journal article
Abstract:
This study analyses the cost of a low-volume basket of mobile services across a sample of Latin American countries, and contrasts these results with standard income and poverty indicators. The main goal is to establish how affordable mobile services are for the poor.
Three general findings emerge. First, the poor generally pay a cost premium for using prepaid subscriptions that allow better expenditure control, though in many cases this premium is much lower than expected.
Second, affordability is an important predictor of mobile penetration. Overall, while affordable handsets and the callingparty-pays system allow a significant number of low-income Latin Americans to become mobile subscribers, the results reveal that the current tariff structure has an inhibiting effect on service consumption by the poor.
Third, since affordability is the most significant barrier to extending the reach of mobile services, as well as the range of services used by the poor, priority should be placed on policies aimed at reducing tariffs and stimulating the introduction of commercial innovations for low-income groups.
Mobile Opportunities: Poverty and Mobile Telephony in Latin American and the Caribbean data sheet 2047 Views
Author:
Hernán Galperin, Judith Mariscal
Publication Date:
Nov 2007
Publication Type:
Report/White paper
Abstract:
Access to telephony for low-income groups is largely based on different strategies of mobile telephony usage. The main goal of this research project is to explore the strategies employed by the poor in Latin America and the Caribbean to access and use mobile telephony services, as well as to identify the major market and regulatory barriers for increased penetration and usage. More generally, it seeks to contribute to the discussion on how access to mobile telephony contributes to improving the livelihoods of the poor –what we call mobile opportunities.
Our results show that mobile telephony is highly valued by the poor as a tool for strengthening social ties and for increased personal security, and that it is beginning to prove useful for enhancing business and employment opportunities. Overall, the survey results suggest that the acquisition of mobile phones by the poor has an economic impact reflected mainly in improved social capital variables such as the strengthening of trust networks and better coordination of informal job markets. These findings reveal the continued need to develop innovative business models that extend the market frontier for mobile telephony. They also highlight the urgent need to rethink public policies that are premised on the mobile phone as a luxury good. Clearly, for the poor, mobile telephony has long been the most cost-effective and accessible alternative.
Tariffs and the affordability gap in mobile telephone services in Latin America and the Caribbean data sheet 1510 Views
Author:
Hernán Galperin
Publication Date:
Mar 2010
Publication Type:
Journal article
Abstract:
This study focuses on the affordability of the OECD’s low-usage basket of mobile telephony services, which includes 360 calls and 396 text messages (SMS) a year, segmented by duration, time of day and destination. In other words, the study compares the monthly cost of prepaid service for a user who makes approximately one call and sends one text message per day. Because our main interest lies in estimating the affordability of this basket of services for users at the bottom of the income pyramid, two indicators are used: (1) The proportion of income that the cost of this basket represents for users in the third income decile, which acts as a proxy for income at the bottom of the pyramid; (2) The affordability gap, which corresponds to the difference between the cost of the basket and 5 percent of the income of the potential users in each income decile.
The main findings are summarized. (1) There is significant dispersion of mobile telephony tariffs in the region, with costs of the low-usage basket ranging from US$45 in Brazil to US$2.20 in Jamaica (in current dollars). The average for the region is US$15. (2) For users who consume a minimum basket of mobile services, prepaid service is less expensive than post-paid service in 13 of the 20 markets in the sample. (3) Overall, mobile telephony tariffs in Latin America are significantly higher than those of OECD countries (2 times more) and other emerging markets (3 times more). (4) The only country in the region in which mobile telephone services can be considered affordable for low-income users is Costa Rica. (5) Despite advances in the adoption of the service, the results of this report highlight a significant affordability gap that limits consumption of mobile telephony services for most people in the region, and point to a need for continued efforts and initiatives to reinforce competition in the market and review the heavy tax burden that affects mobile telephony service in the region.
