The Telecommunications Regulatory Authority (TRA) in Bahrain has recently released the 2012 update of the retail price benchmarking study into telecoms services in Arab countries. The study, conducted by the Teligen division of Strategy Analytics, was commissioned by TRA on behalf of AREGNET (the Arab Regulators Network).

Similar to previous years, the report provides a comprehensive analysis of the cost of telecoms services for different types of user, and considers the cost of fixed and mobile voice, fixed and mobile broadband and leased lines across a number of Arab countries, as well as providing a comparison with average OECD (Organisation of Economic Co-operation and Development) pricing. Development of prices in each of the Arab countries covered since 2008 is also included.

The study revealed that over 2011-2012, prices in the Arab countries have generally come down, however, as prices in other parts of the world had fallen as well, the gap between prices in Arab countries and prices in OECD countries remains.

In addition to the general report, TRA has also released a report which looks more in-depth at the results for Bahrain across the various services, in relation to the other GCC (Gulf Cooperation Council) countries overall as well as to the OECD averages.

Full results from both reports, along with detailed information on the methodology used, are available for download free of charge on TRA's website.

Last week saw the publication of The European Broadband Scorecard, by Ofcom. The report, which looks at coverage, take-up, usage, price and choice of fixed and mobile broadband services in the UK, relative to other European countries, was originally proposed by the Department for Culture, Media and Sport, to allow the Government to measure progress towards its ambition that the UK should have the best superfast broadband network of any major European country by 2015.

The Scorecard focuses on the UK's position within the five leading economies in Europe - the 'EU5' (France, Germany, Italy, Spain and the UK).

The report has found that the UK performs well among the major EU market. On all measures of coverage, take-up, usage, price and choice, it ranks between third and first across the EU5. Specifically, the report finds that the UK:

• has approximately the same fixed broadband take-up, at 32 connections per 100 people, as France and Germany (which have 33 and 35 connections per 100 people, respectively), and take-up in these three markets is considerably higher than in Italy and Spain;
• has the greatest number of fixed broadband connections per household, with a penetration rate of 77%
• is positioned third among the EU5 for superfast broadband coverage, slightly behind Germany and Spain but ahead of Italy and France in this very new market. In June 2012 superfast coverage had reached 65% of UK premises;
• has high mobile broadband take-up - the second highest in the EU5 with 64 connections per 100 people, narrowly behind Spain, with 65 connections per 100;
• has very wide internet usage - highest in the EU5, with 81% of individuals online on at least a weekly basis, and 71% having bought or ordered goods or services online in the past year;
• benefits from highly competitive broadband markets. The proportion of fixed lines operated by the incumbent (BT, with 31%) is the lowest in the EU5, while the market share of the largest mobile operator (EE, with 33%) is the joint lowest;
• has some of the lowest fixed and mobile broadband prices[1]. When assessing various measures of price, the UK leads the EU5 in eight metrics out of twelve.

Obviously, this is a fast changing picture. Coverage and take-up of superfast broadband has increased in the UK since much of the European-comparable data was collected. Operators are currently accelerating fibre roll-out, cable broadband speeds are being increased and the Government is proceeding with its programme of publicly-funded superfast deployment in rural areas, which gained European Commission approval in November.

Going forwards, Ofcom is planning to publish any future Scorecards - assuming that sufficiently robust and comparable data is available - as part of its annual International Communications Market Report. The European Broadband Scorecard is available for download from the Ofcom site.

[1] The price comparisons have been prepared by Ofcom using data supplied by Teligen

For those interested in mobile pricing, and, more specifically, price benchmarking, you might be interested to learn that Teligen, the Pricing and Benchmarking division of Strategy Analytics has just released a short report detailing a system it is developing which will allow users to test new mobile voice and data tariffs, and compare them against existing tariffs in a given market.

Teligen's involvement in benchmarking and tariff tracking goes back some 30 years in the field, along with its involvement with the OECD to provide price benchmarking results based on OECD methodologies spanning over 16 years. With increasing developments being observed around approaches to mobile pricing, however, we have seen a need for operators to be able to explore how new tariffs might behave under both pre-defined and customised usage profiles, as well as how they might change as different criteria within a profile changes.

This has led to Teligen developing a new system, which will allow users to input a set of 'tester' or proposed tariffs to be compared with existing tariffs in a given market, and look at this in the context of a range of different outputs, to help shape these new tariffs. The underlying OECD methodology is used as a basis, but the system will allow users to easily manipulate inputs, around both target usage profile(s) and tariff details, and view a variety of outputs that are more tailored to the tariff analysis.

For example, a test tariff can be altered through quick and easy changes to prices and tariff parameters, and several test tariffs can be shown simultaneously. This is particularly useful, as it will show how sensitive a tariff is to changes in usage, where the key sensitivities lie and what this means for an operator in terms of revenues. Output can be shown for an individual scenario (for example, the revenue that a tariff will generate for a designated number of minutes, SMSs and MB of data), or alternatively, it will be possible to view the revenue profile of a given tariff in a 3D output, and see immediately, in a single graphic, how this will change as specific criteria change - such as the number of minutes or the number of SMSs.

The Mobile Price Analyser will be launched in the near future, but if you want some more information about what it will offer, we have a complimentary insight which is available for download, which provides a good overview.

UK regulator, Ofcom, has recently released the 2012 update of the International Communications Market Report, which compares the availability, take-up and use of services in the UK and a number of comparator countries (France, Germany, Italy, Spain and the USA).

As in previous years, the report covers a number of areas, including:

• an analysis of the UK market in context
• comparative international pricing, comparing the typical prices people for a range of different 'baskets' of communications services
• a review of both the television and audio visual market and the radio and audio market
• an assessment of internet use, in terms of platforms and devices, as well as content and consumption
• comparative international data on the communications sector, comparing the UK to a range of comparator countries in order to assess how the UK is performing in an international context.

The comparative international pricing element of the report, which is based on data and systems supplied by the Teligen division of Strategy Analytics, compares five 'baskets' of services - fixed voice, mobile voice, fixed broadband, mobile broadband and pay TV - representative of the communications use of five typical households. The analysis shows that the UK remains very price competitive, offering the lowest price for all five baskets when a weighted average of single service pricing was taken into account and for four of the five baskets when looking at 'best-offer' or lowest possible pricing.

The low mobile prices in the UK are a key factor in the UK positioning (although, fixed voice and fixed and mobile broadband prices in the UK are also comparatively low), however, the study found evidence that UK communications prices were increasing in nominal terms, and that this was mainly down to increasing mobile prices. In the year to July 2012, the weighted average cost of more than half of mobile connections in the UK increased by between 5% and 31% (in nominal terms).

HD premium pay-TV services were the main area where the UK did not perform well - partly due to the fact that Sky bundles a large number of channels in its premium pay-TV package, as well as charging its satellite TV customers an additional £10 a month to let them access premium channels in HD.

In the analysis the results for France were also favourable, with France having the lowest 'best-offer' including multi-play price for the 'connected family' household[1]. Notably, for this household, France was significantly cheaper than in the UK as a result of the availability of a low-cost quad-play bundle of fixed voice, fixed broadband, mobile and pay-TV services. France also had the second lowest 'weighted average' prices for all five households.

Notably, consumers in most of the six countries analysed were able to make cost saving of between 5% to 40% by buying bundled packages rather than purchasing services individually.

The full study results, along with detailed information on the methodology used, are available for download on Ofcom's website.

[1] A connected family is defined as a family of four with generally high use of several communications technologies. A definition of a connected family can be found in the main report from Ofcom.

Strategy Analytics' Pricing and Benchmarking systems, offered through its Teligen division, have been supporting operators and regulators around the world for more than 30 years, helping them monitor and evaluate pricing strategies for fixed and mobile voice and data services.

Once again, Strategy Analytics will be holding two exclusive breakfast presentations at MWC 2013 which will provide insights into smart devices and smart experiences in a multi-screen world, as well as adjacent market opportunities and new business models for service providers. During the briefings, we are pleased to be able to offer attendees the opportunity to see a live demonstration of both our OECD Mobile Price Benchmarking Service and OECD Mobile Broadband Price Benchmarking Service.

The demonstration will allow you to see the powerful analytical abilities contained within our systems, which have helped our many customers answer critical questions such as:

• What are the prices and price structures of our competitors' services, and how do we compare?
• Which tariffs favour different kinds of usage?
• Where do we rank against comparable markets?
• What is the cost effect for end users when usage escalates?

Demonstrations of a number of other exciting Strategy Analytics' services - the Handset Country Share Tracker, ConsumerMetrix survey database, as well as PriceTRAX and SpecTRAX - will also be available.

If you would like to register for this breakfast event click HERE-->>

Based on findings from the most recent update of Teligen's OECD Fixed Broadband Price Benchmarking service, which considers more than 120 ISPs in 40 countries around the world, residential users can expect to pay on average, between USD PPP 27 and USD PPP 68 per month for broadband and related services. The cost will vary based on the speed of service and whether users opt for standalone broadband or a bundle of services with some combination of broadband, phone and television. Note that these costs only include basic levels of phone and television service that will be included in a multiplay bundle, and do not take into account cost associated with service add-ons, in the form of premium television channels, or additional call bundles, which will attract additional charges over the basic service offerings.

The two tables below show the average monthly cost in US dollars (PPP) for residential broadband services - both standalone and multiplay - across 40 European and OECD countries, and the incremental cost of various multiplay combinations over standalone broadband.

Table 1: Average monthly cost in USD PPP for residential broadband services, December 2012

Source: OECD Fixed Broadband Price Benchmarking, December 2012 update

Table 1: Incremental cost of phone and television service over standalone broadband, December 2012

Source: OECD Fixed Broadband Price Benchmarking, December 2012 update

The incremental cost for phone service ranges from just under 8 USD PPP per month, to over 14 USD PPP per month, while the incremental cost for TV is just over 8 USD PPP per month to almost 17 USD PPP per month. As the speed of service increases and with broadband services more likely to be fibre-based, the incremental cost of TV decreases. By contrast, increases in broadband speed results in an incrementally more expensive phone service. Users taking all three services (broadband, phone and TV) on average pay an extra 21 USD PPP month, irrespective of speed.

A more detailed analysis of broadband price development is available in the recently published insight, 'Broadband prices driven by increasing speeds', which is available for free download.

Broadband services offerings have moved into a period of consolidation, with gradual rather than dramatic changes to both pricing and service features.

Based on an analysis current and past updates of Teligen's Fixed Broadband Price Benchmarking Service, we have observed relatively small shifts in the areas of price, download speeds and service bundling, with the majority of activity happening at the higher service end, e.g. higher speeds of standard and bundled services.

Pricing for lower speed services have remained relatively static, while higher speed (30 Mb/s and above) standalone and bundled services have fallen by 3.5% on average over the last quarter. This less dynamic shift compared to services such as mobile, for example, is in line with what we would expect - subscribers to fixed broadband services, especially when they include add-on services such as phone and television, are unlikely to change provider on a frequent or regular basis, due to the nature of the service. Providers recognise this, and have reflected this in their approach to pricing.

Rollout of higher-speed services, too, is a gradual process - average advertised download speeds have increased by less the 1.5 Mb/s since March 2012, and one which is more evident when looking at changes over the course of a year, or even longer.

Going forwards, we expect to see a continuation of current trends, with gradual, rather than dramatic shifts in both pricing and service features.

A more detailed analysis of these developments is available for free download.

The issue of Net Neutrality is one that has been widely debated, but to date, implementation is limited. Chile became the first country in the world to implement Net Neutrality, back in July 2010. The US also has strong Net Neutrality FCC Regulations in place for fixed networks, and something Strategy Analytics has reported on in other posts.

Following the introduction of legislation in June 2011 on Net Neutrality, the Netherlands has, as of last week, become the first European country to adopt net neutrality provisions into national law. What this means for carriers is that they can no longer charge extra, or impose special conditions for any internet service. Furthermore, they cannot determine what sites their customers visit. From a user perspective, this means that they have unrestricted access to the OTT services that are eating the operators’ lunch – services such as Skype, WhatsApp and Viber, for example – without the worry of having to pay extra to do so, or have connection speeds throttled. Only under exceptional conditions – network congestion and security, for example – are operators allowed to slow down user connections. The law also includes provisions for anti-wiretapping, prohibiting the use of deep packet inspection (DPI) on users’ tariff, unless the user says it is ok to do so. 

While this may appeal to some users, others may like the ability for data traffic to be treated differently by application to perhaps give them better options for a la carte pricing and improved user experience. It is unclear if operators are allowed to differentiate traffic if it is a user-selected subscription where the user has opted in for DPI.

The counter-argument surfacing is that this move to net neutrality could, in fact, lead to reduced innovation around new services for users, and furthermore, that an end-users’ broadband experience would be more susceptible to network congestion, simply because operators aren’t allowed to discriminate against bandwidth-hungry users. Another unwelcome outcome could be an increase in service prices by providers, to compensate for the restrictions

This is a contentious debate that is likely to run for some time to come, and has the potential to encourage more countries to consider whether to limit their providers in this way. Very interesting times ahead, and something that Strategy Analytics’ will be keeping a close eye on.

Based on data from the 113 operators and 33 countries covered in Strategy Analytics' Mobile Broadband Price Benchmarking Service, the proportion of table-specific plans currently accounts for 1,135 of the 3,000 plans covered in the service - or 40% of all offers. This is not surprising when we consider the dramatic rise in the use of tablets, and the fact that tablet use presents a good revenue opportunity for operators, providing they can hit the sweet spot with plans. Operators offer a growing number of tablets, with many offering at least 5 within their portfolio of plans, including the new third generation Apple iPad which is making an entrance. We are also seeing the reintroduction of the Samsung Galaxy Tab in various markets, following the resolution of the legal issues it faced. The trend towards own-branded tablets seems to have slowed somewhat, at least for now. Meanwhile, the introduction of 4G/LTE technology has brought about the first 4G/LTE tablet tariffs in Germany, with maximum offered download speeds as high as 100Mbps.

Approaches to device subsidisation - an issue which is becoming more prevalent of late - vary across providers and countries. Looking across France, Germany, Italy and the UK in Europe, and the US, compared to December 2011, levels of subsidy are broadly unchanged; Italian and German mobile operators continue to offer the highest subsidies for tablet devices, while US mobile operators mostly abstain from subsidies.

A more detailed analysis of how mobile broadband charges are evolving is available for download.

As both LTE deployment and upgrades to HSPA/HSPA+ technologies gather pace around the world, average advertised maximum download speeds for mobile broadband are growing. As of March 2012, based on almost 3,000 plans from 113 operators across 33 countries in Strategy Analytics' Mobile Broadband Price Benchmarking Service, average maximum speeds reached in excess of 14 Mbps, a rise of over 13% since December 2011, while over 730 plans - almost a quarter of the total - have maximum advertised download speeds of 21 Mbps and above. It is debatable how many users actually achieve these speeds, of course, and mobile broadband is unlikely to be a substitute for fixed broadband any time soon, in most markets at least. Given this steady rise, however, it is increasingly a viable complement to fixed services. This uplift in speed has been accompanied by an 8% increase in average allowances, which reached 8.3 GB by Q1 2012.

As we would expect, postpaid plans are typically cheaper than prepaid - for some usage levels, up to a third cheaper. Naturally, the balance here is the ongoing commitment required by postpaid plans.

A more detailed analysis of how mobile broadband charges are evolving is available for free download.