|
|
|
|
 |
|
|
|
|
|
|
|
 |
 |
 |
|
||||
| A Price Index for Mobile Telephony | |
||||||
 |
 |
 |
|
||||
 |
|
|
|
 |
|
||
|
|
|
|||||
|
June 2000 The Oftel strategy statement ‘Achieving the best deal for telecoms consumers’ set out Oftel’s plans to review competition in the mobile market. An essential part of this review is an analysis of price trends. Last year Oftel appointed National Economic Research Associates (NERA) to construct a suitable model to allow Oftel to track price changes over time and reflect the actual experience of different types of customer. The results of the price monitoring study for January to December were posted on the Oftel web-site in March (click here for these results). NERA has now updated the index to reflect price changes in the first quarter of 2000. The model classifies mobile customers into particular categories or ‘profiles’ according to usage patterns and then applies operator tariffs to these profiles. User profiles of typical customers were identified from responses to a consumer survey carried out early in 1999. For each user profile the model estimates the proportion of calls made at peak, off-peak and weekend rates. The model also estimates the proportion of different call types made by each profile. Estimates are made of the proportion of calls made to fixed networks – local, national or international; calls made to mobile networks – own or other; and other calls such as voicemail, fax or SMS. While customer profiles may have changed since the original survey was conducted the model provides an indicative guide to general price trends during 1999. The model does not consider the actual cost of handsets but does take into account connection fees and handset subsidies as well as call charges. Full details of the model were outlined in the NERA report ‘A Price Index for Mobile Telephony’. To reduce monthly fluctuations in the latest figures, however, NERA has used a one-year moving average to estimate subscriber growth and the rate of new connections. This change means that results presented in the original NERA report for January to June have been revised slightly. In addition NERA has made some small revisions to previous data following clarification of the charging procedures on some packages. Recently, a number of new tariffs have also been introduced which are different in structure from those on which the model is based. These tariffs are excluded from the current index although are unlikely to significantly affect the overall index at this stage. Oftel is working with NERA and the operators to assess whether these tariffs should be incorporated into future updates of the model and how the index should be interpreted in the context of the overall market review. Prices of mobile telephony services fell by 2 per cent in the first quarter of 2000. This fall was due almost entirely to a reduction in the cost of pre-paid packages which were 5 per cent cheaper in March than at the end of 1999. Prices of advance and monthly contract packages were relatively unchanged from December levels. Overall prices are now 18 per cent cheaper than at the start of 1999. Pre-pay prices are 28 per cent lower while advance and monthly contract prices are 10 and 15 per cent cheaper respectively.
There were small reductions in the cost of mobile telephony services for all user groups with low users benefiting from slightly larger falls than higher users. Prices for all user groups are now between 15 and 20 per cent lower than January 1999. Prices for customers with a telephone for emergency use or to receive incoming calls only (so called ‘zero-use’) are now 25 per cent cheaper (Figure 2).
Pre-pay customers with lower usage levels saw the largest reductions in prices during the first quarter of 2000. Prices for low users fell by a third and for low to medium users by a quarter. Prices for both these groups are now less than half January 1999 levels (Figure 3).
Prices for all user groups on monthly contract packages remained relatively unchanged although there were some falls for advance contract customers particularly those with low usage. For medium users, however, prices remain slightly higher than January 1999 levels (Figures 4,5).
More detailed results are available on request. Data are presented in index form only and are not available for individual operators. Oftel will, however, be looking at relative price levels and other specific trends in the context of the overall review. For further information please contact: Kenny Osborne Tel: 020 7634 8973 Or by e-mail
|
|
||||||
|
|
||||||
 |
 |
|
|||||
 |
|
||||||
