Price level drives mobile connectivity adoption and use
The high, in many cases unaffordable, Gigabyte prices commanded by operators in protected markets where challengers are not present are effectively suppressing mobile broadband penetration and most importantly mobile data consumption.
In competitive markets, where a challenger operator group is present and where Gigabyte prices are up to 100 times lower than in protected markets (see Finland 0.17/GB versus Greece 17/GB) mobile data consumption per capita is several times higher (up to 20 times) than in protected markets. There is a clear pattern of significantly lower usage in protected markets where competition is not functioning and operators are collectively suppressing demand by keeping Gigabyte prices artificially high. High prices have similar effect, although not so pronounced, on mobile connectivity adoption. Mobile broadband population penetration is lower in protected markets where Gigabyte prices are significantly higher.
However, as we have argued earlier in our reports penetration is not a very robust competitiveness metric of mobile connectivity. The number of reported active connections often includes large number of connections with very little or almost immaterial usage. Smartphone connections with pay as you go data rates or where the included volume is very small (few tens or few hundred Megabytes) inflate materially the reported mobile connectivity adoption rates in protected markets. Connecting your house to the electricity grid is one thing, switching on the lights and the oven is another.
Mobile data consumption per capita is the most robust mobile connectivity adoption metric. Things are adopted when taken into use.
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The state of 4G pricing, mobile data usage, spectrum usage, network capacity utilization and fixed-to-mobile broadband substitution. After its comeback in 2016, in 2017 unlimited mobile data goes viral and spreads to 22 countries. And while in competitive markets such as France and Denmark consumers can buy 100 or unlimited gigabytes for less than 30, in tight mobile oligopoly markets such as Portugal, Greece and Hungary 30 hardly buys any gigabytes. Europes mobile data divide widens further: 200x more gigabytes for 30 in smartphone plans, 600x more gigabytes in mobile broadband plans, 200x difference in median gigabyte prices, 40x difference in mobile data usage per capita and spectrum usage.
The market is changing. Mobile data pricing and network economics metrics and research reports for industry professionals