Mobile Communication Price Parity and index: Making money off the poor

Abstract

The price for mobile services is the most important determinant in the way low-income households use mobile phones. Based on existing data on mobile communication prices, a global index for measuring the price of mobile communication with 2G handsets has been developed. This index allows the comparison of price levels in different countries. The first step involves defining a mobile communication basket, containing a specific amount of speech and short messaging per month. The definition of this basket is based on the OECD definition of a standard basket of monthly mobile communication consumption (OECD, 2010) and targets the consumption habits of low income users. Two different indices are proposed. A first calculation from the years 2009 to 2012 involving the indices of 149 countries provides a useful overview of the global mobile price landscape.