Price level indices

The price index of telecommunications services represents the change in the total price level of telecom services used by households.

The weighted values of voice and messaging services and data transfer services in the price index are defined on the basis of the earnings received by telecom companies from households for the specific services. The indices presented are real price indices, meaning that they take changes in general price levels into account. In practice, the indices have first been calculated as nominal price indices representing the euro-denominated change in the nominal price, after which they have been converted into real price indices on the basis of the consumer price index published by Statistics Finland.

The indices are based on information collected by FICORA from telecom companies concerning the turnover of telecom operations, the number of subscriptions, call minutes, the number of text and multimedia messages and the volume of mobile data.

The indices represent the development of actual prices paid by consumers. The price indices do not indicate how the price of a single company has developed but how the price level of a specific service has developed in general. The calculated indices also take into account the impact of various special offers on the prices paid by consumers for telecom services.

On the basis of the price indices, the prices of communications services have decreased significantly in recent years. The prices of mobile voice and messaging services have fallen by 40 per cent from 2008. Last year, the price index decreased by a few per cent. The price index of mobile data has nearly halved since 2008, even though it has remained fairly unchanged over the past two years.

Furthermore, the prices of data transfer services in the fixed network have decreased by more than 40 per cent from 2008, with the price index falling by 7 per cent last year.

Only the use of fixed telephone services has become more expensive for consumers compared with 2008. Measured by the price index, costs arising from fixed-line telephones have nearly doubled after 2008. At the same time, the use of fixed telephones has collapsed since 2008. In 2008, households used more than one million fixed telephone subscriptions, while the corresponding figure at the end of last year was 270,000. Therefore, the increase in prices concerns fewer and fewer consumers. At the same time, the most popular mobile voice and data services and fixed broadband services have become more inexpensive.

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Figure: Price indices of electronic communications services in 2008–2014 (2008=100)

This article is a part of FICORA's Communications Sector Review 3/2015.

Key words: Internet, Telephone, Broadband, Land-line phone, Mobile broadband, Mobile phone, Prices, Articles, Reviews, Statistics

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