Mobile users spending an extra two hours per month making calls as global prices plummet - Mobile World Live

Mobile users spending an extra two hours per month making calls as global prices plummet

01 SEP 2011

Declining mobile prices over the last decade have prompted the average mobile user to spend an extra two hours a month making voice calls, according to a new Wireless Intelligence report.

The new report – ‘How pricing dynamics affect mobile usage’ – found that the Effective Price Per Minute (EPPM) of mobile voice calls has fallen from a global average of US$0.32 in 2001 to just US$0.09 last year.

Over the same period, the average Minutes of Use (MoU) per user per month has jumped by two-thirds, from 178 minutes in 2001 to 296 minutes in 2010 – or from three hours average talk time per month to five hours.

Using this data, it is possible to model price sensitivity across global mobile markets. The study found that during the period in question, each US cent decrease in EPPM resulted in an average increase of 5.6 minutes calling time per month for every mobile user in the world. Total global voice minutes reached 1.6 trillion in 2010.

“While the last ten years has seen the number of global mobile connections grow fivefold, the actual usage of mobile devices has grown at a much faster rate,” said Wireless Intelligence analyst and report author Calum Dewar. “The most significant factor in this relationship is the simultaneous decrease in call prices.”

The report highlights a number of other factors behind rising levels of mobile usage, including increasing competition between operators, new pricing strategies, and fixed-to-mobile migration.

The decline in prices was found to be more of a factor in rising mobile usage in the developing world, where MoU has more than doubled since 2001 to 295 minutes per user per month in Q4 2010 – now almost at the same level as the developed world (298 minutes). Meanwhile, mobile pricing in the developing world (EPPM) had fallen to just US$0.05 in 2010, a decrease driven by ultra-low-cost mobile markets such as India.

“On average, mobile users in the developing world are almost twice as price sensitive as those in the developed world,” says Dewar. “In recent years India has emerged to challenge China and the USA in terms of EPPM, with the high level of competition in the country driving the average call price down to just US$0.01 per minute. At the other end of the scale, highly-advanced mobile markets such as Japan, Taiwan and Australia exhibit high EPPMs and correspondingly low rates of MoU.”

Global MoU/EPPM, linear average (2001 – 2010)
Source: ‘How pricing dynamics affect mobile usage’; Wireless Intelligence (September 2011)

The new report ‘How pricing dynamics affect mobile usage’ is available to Wireless Intelligence customers and select members of the media. Please contact [email protected] for further information.