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Summary:

Wireless Intelligence took a look at how competition has fared among the wireless industry worldwide and found that markets with a large number of mobile operators saw price declines commensurate with markets that had a more concentrated number of wireless carriers.

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I write a lot about broadband competition, but for the most part I stick to wireline service. Wireless Intelligence, the analyst arm of the GSM Association, recently took a look at how competition has fared among the wireless industry worldwide. In general, it found that markets with a large number of mobile operators saw price declines commensurate with markets that had a more concentrated number of wireless carriers. According to Wireless Intelligence, the effective price per minute decreased from $0.25 in 2000 to $ 0.11 in 2010 in concentrated markets and from $0.33 to $0.13 over the same period in fragmented markets (see chart).

The effective price per minute takes the total ARPU of a carrier divided by the number of minutes used. It primarily reflects voice costs, although as data makes up a greater percentage of the average revenue per user the numbers become a bit skewed. However, this also lends credence to the idea that voice is losing value. The study also determined what makes markets more competitive, with number portability and compulsory SIM card registration helping out. However, the biggest competitive drivers are mobile virtual network operators offering lower prices that established operators have to respond to, especially in markets with a few dominant players.

Related content from GigaOM Pro (sub req’d):

  1. What a twist of fate. Minutes go down, messages go up (6000 times markup):
    http://www.rd.com/money/10-outrageous-markups/

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