Visualisation and mapping does not compensate for poor data
By Onkokame Mothobi (PhD)
With Internet-based services taking the centre of an increasingly digital global economy, reliable and up to date data sets are crucial for the formulation of evidence-based policy. Critical attention, however, should be paid to methodologies used to measure and compare indicators for policy formulation and to assess outcomes. One of the critical data points used to assess competitive outcomes and the impact on consumer welfare is price. Mobile data prices are increasingly used to assess Internet service affordability, among other variables that contribute to affordability measures.
Recently Cable publicised information covering 1GB data prices for 230 countries for the period 23 October to 28 November 2018. They ranked the countries based on the average between the lowest and highest price for 1GB. At an average price of USD 0.56, USD 0.68 and USD 0.88, Cable ranks Rwanda, Sudan and the DRC respectively as among the top 10 cheapest countries in the world. India, with an average price of USD 0.26 for 1GB data, is ranked first among the 230 countries. The most expensive country is Zimbabwe, with an average 1GB data cost of USD 75.20. This price is 289 times higher than the cheapest country, India, according to Cable.
Besides the average price not reflecting the actual price paid by consumers, the Cable methodology does not compare similar products. Data packages are priced based on the number of MB provided and the validity period. The Cable methodology seems to have completely failed to take this into consideration. To compare prices across countries we need to use a methodology that can compare similar packages. Because data products differ between operators and across countries this requires researchers to generates pricing baskets.
Cable data is unreliable and inaccurate
The pricing data that is used by Cable to rank countries is problematic. The average monthly cost of each plan is calculated based upon 1GB of data. For example, a 10GB SIM with a cost of USD 30.00 would be calculated at USD 3.00 per gigabyte. An assessment of headline retail prices shows that consumers of small data bundles pay inexplicably more on a per MB/GB basis. For instance, relative to a monthly 10GB, a consumer buying a 1GB data package pays roughly three times the price on a per GB basis for the same validity period.
Researchers and regulators should be cautious when using this data for benchmarking or comparison purposes. Countries are benchmarked on an effective prices, which does not in any way reflect the actual prices paid by mobile consumers. More problematic is that the average price is calculated using different data packages.
For instance, it lists South Africa, ranked 143 in the world, as offering the cheapest 1GB at USD 0.71 (around ZAR 10) but also the most expensive 1GB data at USD 35.06 (ZAR 500). While there is no 1GB package that costs USD 35.06 or has over the last year, the cheapest offer of USD 0.71 appears to reflect the 1GB data “Just 4 You” product offered by Vodacom. A weekly product which provides a user with Internet connectivity between 11:00 and 17:00 only. “Just 4 You” products are priced based on each consumer’s unique consumption patterns, therefore using these products to rank countries does not adequately represent the cheapest price accessible to most people in the country.
As argued above, benchmarking studies or country ranking exercises require that comparisons should be rooted on similar products. While disregarding the price differential between small and large data packages is is a serious miscalculation by Cable, the ranking of countries using different 1GB data products is concerning. For instance, in Botswana, the cheapest monthly product captured by Cable is 1GB at USD 9.01 but this has a different validity period to the cheapest 1GB data price captured for South Africa, rendering the dataset unusable for comparative purposes.
Download the full policy brief here 2019_Policy Brief Pricing No 1_Africa Data Prices.