If you look at the latest International Telecommunications Union affordability rankings you’d get the impression that New Zealand is doing better than Australia at mobile, but is behind on fixed broadband.
That’s not the case, but it looks that way because of the methods used to create international table rankings. The rankings are not meaningless, but they are hard to interpret and make sense of.
The ITU ranks New Zealand at number eight in the world for high-consumption mobile-data-and-voice. Australia sits at 22.
Meanwhile New Zealand is 41 for fixed broadband while Australia sits at 36.
Not the lived experience
These two rankings are opposite to the everyday experience of telecommunications customers in the two countries.
These kind of ranking tables are often a little strange. That’s because they tend to use artificial user cases to illustrate difference between markets where in reality there is a lot of nuance.
Remember here the tables are about affordability. The ITU measures and compares the prices of entry-level fixed broadband plans.
It then compares these prices with a nation’s gross national income (GNI). This is a way of relating prices to people’s earnings.
As a rule countries with a lower income pay proportionately more for telecommunications services. Which is a way of saying they are less affordable.1
It turns out New Zealand’s entry level plan is a 50mbps fibre plan with a 60GB cap. Prices are converted to US dollars. In this case it comes in at US$44.97. The price also includes 15 percent GST.
That may well be the lowest plan on offer in New Zealand, but it’s a plan almost no-one buys.
Australia’s entry level plan is 20mbps with a 100GB cap. It sells for US$52.30. Australian GST is 10 percent. In other words the plan used for comparison is far slower and more expensive, yet includes more data.
According to the ITU when the GNI is taken into account Australia gets an affordably score of 1.2 while New Zealand gets a score of 1.3. So we sit a few places behind Australia in the fixed broadband table.
Mobile voice and data
The same methodological weirdness works in New Zealand’s favour when it comes to measuring high consumption mobile voice and data plans.
New Zealand’s plan costs US$14.53 and buys 200 voice minutes, 500 SMS messages and 1.8GB of data. Australians get unlimited calls, unlimited SMS and a whopping 15GB of mobile data for US$36.61.
Going back to the affordability scores, New Zealand gets 0.4 while Australia gets 0.8.
These ITU tables are useful when comparing, say, New Zealand’s year-on-year performance. That tells you if telecommunications is becoming better or worse value.
They are also useful in aggregate. The latest report tells us that entry level mobile-voice is affordable in most countries. It tells us prices have fallen in the last few year relative to income.
It also says that while fixed broadband prices around the world have remained more or less stable, download speeds have increased.
Yet when it comes to benchmarking, say, New Zealand’s performance against other countries, it’s hard to tease out useful data. Anyone who has operated in Australia and New Zealand knows our fixed broadband is better priced, while Australian mobile data is less expensive.
- Economists reading this may think this explanation is too simple. ↩︎