Broadband prices in Latin America and the Caribbean
Date
2013-10
Authors
Galperin, Hernán
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Journal Title
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Publisher
Universidad de San Andrés. Departamento de Derecho. Centro de Estudios en Tecnología y Sociedad
Abstract
This study discusses the current situation and evolution of broadband service
offerings in Latin America and the Caribbean. The primary source of data is the
annual survey of broadband plans conducted by the Center for Technology and
Society at Universidad de San Andrés since 2010. The survey encompasses all
broadband plans (fixed and mobile) offered by service providers with over 10% of
market share in the region’s most relevant markets (20 countries in total).
The findings reveal a mature fixed broadband market in Latin America. While the
cost per Mbps of advertised speed has dropped significantly between 2010 and 2013
(-58%), market entry prices have only dropped 11% over the same period. This
indicates that fixed broadband operator prefer to compete on service quality rather
than price in the middle and high-income segments of the residential market.
Further, despite improvements in some price indicators, the gaps with OECD
countries continue to be large. As an example, a 2.5Mbps connection in Latin
America is, on average, three times more expensive than in the OECD.
The findings also corroborate the opportunity to expand the market frontier with
mobile broadband services. A price comparison with similar fixed access services
reveals that mobile broadband is, on average, 23% cheaper. Yet the data is not
conclusive as to whether mobile broadband prices exert pressure on fixed broadband
prices. Also, an affordability analysis shows that, on average, Latin American users
must spend six times as much as their OECD counterparts to purchase the same
mobile broadband service package.
The key potential offered by mobile broadband stems from the greater
segmentation of broadband plans, which enables a better fit between user
preferences and willingness to pay, particularly in the low-income market segment.
Nonetheless, some of the observed segmentation strategies by mobile broadband
operators warrant regulatory attention, as they may challenge basic principles about
Internet network openness and lead to anti-competitive effects in the so-called OTT
(over-the-top) market.
Description
Fil: Galperin, Hernán. Universidad de San Andrés. Centro de Estudios en Tecnología y Sociedad; Argentina.