In Business Model, Internet Access, Mobile

Though Internet service providers might not necessarily enjoy the trend, tt is easy enough to predict that prices for most consumer communications services will be as much as 40 percent lower by about 2020, and mobile Internet access might be especially more affordable. 

The International Telecommunications Union has called for 40 percent lower prices by 2020.  That also is a simple extrapolation from existing price trends.

Since 2008, prices for fixed and mobile consumer services have dropped by significant amounts. On a per-person percent of income basis, fixed network Internet access  prices have fallen by 6.6 times between 2008 and 2014, for example.

Mobile prices fell more than half between 2008 and 2014.

In other words, the hoped-for price reductions already are happening.

The cost of a mobile service corresponded on average to five percent of per capita gross national income in 2012, having fallen to 4.4 percent in 2014. The 2020 target is a maximum price representing three percent of GNI.

So some 29 percent of the price reduction required to meet the ITU 2020 consumer price target has already been achieved.

Prices for prepaid mobile services that are the mainstay of mobile service in most developing regions have fallen even faster.

Worldwide, telecommunications should be 40 percent more affordable by 2020, the ITU says.

Analysts who work across regions and nations globally know there are issues with such comparisons. To normalize “prices,” analysts often use purchasing power parity or measures that index communications spending to household income, for example.

Those methods often provide a more-realistic way of comparing prices, since they are expressed in terms that are normalized for purchasing power differences.

In that regard, an International Telecommunications Union report shows that fixed network broadband prices are exceedingly low, expressed as a percentage of gross national income per person, in a number of countries including the United States–which might be unexpected–and

Hong Kong, Singapore, China and Japan, where low prices would not be unexpected.

Using the per-capita GNI method, fixed network high speed access costs less than one percent of per-person GNI, making U.S. fixed network broadband services among the “most affordable” in the world.

China, Japan, Korea Hong Kong and Singapore rightly are considered places where fixed network Internet access is affordable.

In Macao (China), Japan, Hong Kong (China) and Singapore, the price of fixed broadband is less than one percent of per-person GNI, as is the case in the United States.

Prices have become relatively affordable and lie below five percent of GNI per capita  in about half the countries in the Asia-Pacific region, including Indonesia, China, Thailand and Pakistan.

India and Bangladesh, both with a fixed-broadband basket value of 5.3, are very close to this target as well.

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