Ficha de detalle de publicación

TITULO: Tariffs and the affordability gap in mobile telephone services in Latin America and the Caribbean

AÑO: 2010
ETIQUETAS: affordability gap, tariffs, mobile telephony services, affordability of services

Since 2007, the Regional Dialogue on the Information Society (DIRSI) has periodically compiled information about mobile telephony tariffs in the main markets in Latin America and the Caribbean, using the basket of mobile services methodology developed by the Organization for Economic Cooperation and Development (OECD). The purpose is to monitor tariff trends as markets mature and estimate the affordability of the service for lower-income users. This estimation is crucial for the design of universal access strategies, because the level of affordability determines the boundary of market efficiency. Without empirical analysis of the affordability of services, it is impossible to determine which markets are commercially viable without the need for subsidies. The goal, therefore, is to support the design of public policies that expand the market boundary while minimizing the public subsidy needed. 

In light of this objective, 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.

Research dissemination:

The Working Paper was mencioned in a Página 12 aticle