The South American research network, DIRSI, have just published a report entitled “Tariffs and affordability gap of mobile telephony services in Latin America and the Caribbean” which profiles mobile affordability in Latin America and the Caribbean. In this post I contrast their approach with my own fledgling work on a Fair Mobile index for Africa.
If you read my Fair Mobile post, you may remember that I chose to map how many minutes of mobile use and how many text messages one could send for a day’s labour at minimum wage in different African countries. I used an ILO database of minimum wage information and scraped the call/SMS charges from operator websites. As way of dealing with the myriad call plans available, in each country I chose prime-time, cross-network pricing from the dominant mobile operator. Obviously this doesn’t take into account special offers or on-net discounts but it does offer a reasonable market snapshot.
The weakness in my approach has been the minimum wage data. To begin with it was only available for 22 African countries and I was really looking for something more comprehensive. Worse than that though, was the realisation the there can be several “minimum wage” standards in a given country. Minimum wage for an urban worker is not the same as minimum wage for an urban worker which is often different again for a domestic worker. If anyone knows of a good source of minimum wage data for Africa, I would really love to know about it.
So how have the DIRSI researchers gone about their work? First they decided to go with a fixed amount of mobile usage. They used an OECD standard for low mobile phone usage over a year, which is 360 calls and 396 text messages. This averages out to one call and one text message per day. Using the OECD standard gives them the advantage of being able to compare their price basket, once calculated, with OECD country information.
To be able to compare the above costs with income, they took income data from the Socio-Economic Database for Latin America and the Caribbean which maintains income data broken down into deciles of income for all countries in the region. Sadly, as far as I am able to determine, this sort of data doesn’t exist in any sort of comprehensive source for African countries.
Having obtained the income data, they made the following assumptions:
- They chose the third decile of income as a proxy threshold for earners at the bottom of the pyramid
- They determined that the bar for affordability in mobile spending was spending less than 5% of total income on mobile services
I assume they chose 5% for their bar because expenditure on telecommunications in developed countries is around 2-3% percent of income.
This provides some interesting results. You can see from bar charts like the one below that there is a huge variance in affordability. This is consistent with my findings across African countries.
More interesting though is the country charts that they are able to generate which illustrates affordability across income brackets. In this chart at the right you can see that in Brazil, communication is deemed affordable for about 10% of the population. The whole report is worth the read and can downloaded from the DIRSI website. It is only available in Spanish at the moment but a translation is planned and Google Translates actually does a very passable job with it.
I think an interesting avenue to pursue with Fair Mobile would be to explore links between mobile costs and other indicators, perhaps corruption indicators or GINI coefficients. Stand by for more. Suggestions welcome.