Lanka among four countries to offer cheap mobiles

Two recent studies have found that Sri Lanka is among four countries that offer the most affordable mobile services to the poor in emerging Asia and the world.

The first study conducted by LIRNEasia, a regional policy and regulation think tank, has found that the costs of using mobile telecom services are among the lowest in South Asia for all types of users.

For the low user, essentially the poorer use, the average monthly cost of using a mobile in Sri Lanka is as low as USD3.83 per month if using prepaid.

Sri Lanka came in fourth place in the affordability rankings for low users, not too far behind Bangladesh (USD2.46) and Pakistan (USD3.34) and very close to India (USD3.72). For postpaid users, the lowest low-use basket was in Bangladesh (USD 7.14). India, Pakistan and Sri Lanka followed.

When the prices are converted to USD purchasing power parity, to better reflect affordability, Pakistan offers the lowest low-user prepaid basket (USD 10.57) and is followed by Bangladesh (USD 11.66), Sri Lanka (USD 13.39) and India (USD 15.04).

A second study by Nokia, a world leader in mobile handset manufacture, has found that Sri Lanka has the lowest 'total cost of ownership' or TCO within a group of 80 emerging markets. While the average TCO was found to be USD13.16, Sri Lanka was among the only four countries (the others being India, Bangladesh and Pakistan) to have a TCO below USD5.

This is a significant achievement, as the TCO is a critical factor in determining mobile subscriber growth.

The full study is "Affordability key in bringing digital inclusion," The two studies, using different methodologies, confirm that the costs of using mobile telephone services in South Asia are low, particularly for the poor.

"The relative positions of Bangladesh, India, Pakistan and Sri Lanka vary depending on assumptions and exchange rates used, but overall, the fact remains that these four countries offer the lowest mobile prices in the world today," said Executive Director of LIRNEasia and former Director General of Telecommunications Dr. Rohan Samarajiva.

Dr. Samarajiva highlighted the importance of the two sets of findings: 'in a country where most at the bottom of the economic pyramid can only afford about USD30 to get connected, and less than USD 5 per month on usage charges, these are significant findings.'

While affordability is a key barrier among the unconnected, the perception of the cost of getting connected at the bottom of the pyramid (BOP) is much higher than reality, according to Samarajiva.

This means that operators need to improve their marketing strategies, to communicate better to the BOP.

The LIRNEasia study compared mobile prices in South Asia using price baskets, derived from those used by the Organisation for Economic Co-operation and Development (OECD).