Consumer prices of telecommunications services continued to decrease steadily in 2015

In 2015, an average Finnish household-dwelling unit used EUR 52 per month in telephone and broadband services which is about EUR 0.70 less than in 2014. The price level of telephone and broadband services has come down by more than one third during the past seven years. However, there is variation in the price trends between different services.

By combining the data on subscription numbers collected by FICORA and current value added tax to revenue information, it is possible to calculate the price paid by residential customers per one subscription. This average monthly consumer price (like average revenue per user, ARPU) should be examined by subscription type because different subscriptions are used in a different manner. Furthermore, it should be taken into account that fixed network subscriptions are often used by the entire household, whereas mobile network subscriptions often only have one user.

Fixed network subscriptions may be divided into broadband and voice subscriptions. As regards mobile network subscriptions, the situation is not so simple. Even though there are mobile network subscriptions that are intended to be used merely for voice or data transfer, the majority of the subscriptions may be used for both services. Therefore, it is sensible to examine mobile network subscriptions as a whole when calculating average monthly consumer prices.

In 2015, consumers paid EUR 14.13 per month per mobile network subscription which is EUR 0.15 more than in 2014. Correspondingly, consumers paid EUR 17.59 per fixed broadband subscription which is EUR 1.79 less than in the previous year. The price paid per fixed telephone subscription increased by EUR 1.63 to EUR 22.78 during 2015.

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Figure: Monthly consumer prices of telecommunications services 2008-2015

Price level indexes help analysing the changes that occur in service prices during a longer period. The indexes may also help to identify the changes in the use of services as well as the general change in consumer prices. On this basis, the prices of telecommunications services have decreased materially since 2008. At the end of 2015, households and businesses paid 36% less for voice and data transfer services than in 2008. The current price of data transfer services is only about 58% of the price in 2008, and as regards voice services, the corresponding percentage is 68%. The price level of mobile phone services and fixed broadband services fell during 2015 while consumers paid more for fixed telephone services and mobile data transfer services.

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Figure: Price indexes for telecommunications services

The price index for telecommunications services represents the changes in the overall price level of telecommunications services used by households. The indexes for voice and data transfer services measure the changes in the price level of these services. The weighting of voice and data transfer services in the price index for telecommunications services is determined according to the revenue received by telecom operators from households for such services. The indexes in the figure are real price indexes which means that they include the general price-level change. In practice, the indexes are calculated based on nominal price indexes depicting the change in the nominal price in euro. Then, they have been transformed into real price indexes using the consumer price index of Statistics Finland.

The indexes are based on the information telecom operators have submitted to FICORA on the telecommunications turnover, subscription volumes, call minutes as well as text and multimedia message volumes. The index value is 100 in the base year 2008, and in other years the index value indicates the change in the price level compared to the base year.

More information about the statistics is available in this article.

Key words: Internet, Telephone, Prices, Articles

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