[LINK] Broadband Around the World - Telstra claims one of the highest ARPU's in the World
rchirgwin at ozemail.com.au
Fri May 22 10:14:15 EST 2009
Tom Koltai wrote:
>> -----Original Message-----
>> From: link-bounces at mailman1.anu.edu.au
>> [mailto:link-bounces at mailman1.anu.edu.au] On Behalf Of
>> Richard Chirgwin
>> Sent: Friday, 22 May 2009 7:49 AM
>> To: link at anu.edu.au
>> Subject: Re: [LINK] Broadband Around the World
>> stephen at melbpc.org.au wrote:
>>> Broadband Around the World
>>> Catherine Rampell, May 20th 2009
>>> The Organization for Economic Cooperation and Development
>> has released
>>> its latest data on broadband access
>>> Eg, Broadband Subscribers Per 100 Inhabitants, Dec 2008:
>> Australia is
>>> the sixteenth country at 25 people per 100. Their OECD
>> average is 22.5
>>> Eg, Broadband Average Monthly Subscription Price $US, Oct
>> 2008. Aussie
>>> is twenty eighth at $56.21/month, and the OECD average noted is
>> Subscription price averages are a meaningless measure that
>> fail to take into account the distribution of users across
>> different plans.
>> To demonstrate this, get some real numbers. Eg, from the
>> Telstra annual report:
>> June 2008 subs - 3,269,000
>> Income to June 2008 - $1.805 billion
>> Approx ARPU - $A46 per month
>> In USD - $34.50 per month
> Unfortunately Richard - Telstra also do their "accounting" in weird and
> wonderful ways. For example, in the Glossary section they state that:
> WBB: Wireless broadband. A wireless broadband SIO is defined as any
> customer with a BigPondR wireless device or a mobile wireless broadband
> product on a plan with a data access fee of $29 or above.
> Whether or not It's used.
> Therefore - as most phones have data plans tacked on - the $29.00 per
> month for almost no data (200mb I believe) acts as skew to the numbers
> resulting in an artificial lowering of the ARPU.
> So the OECD numbers as near as I can make out are correct.
Correct, but invalid. I'm not criticising the maths, but the base data, which is
> Telstra say:
> The broadband sector is in a significant growth phase as the demand for
> high speed internet access accelerates. We have recently seen large
> increases in broadband customers and broadband average revenue per user
> ("ARPU") despite a steady fall in prices as providers compete for market
> share. We expect the broadband sector to continue its expansion through
> the provision of new innovative products and we expect to be at the
> forefront of this market dynamic with our ability to integrate services
> over our fixed and wireless platforms. We believe our growth in
> broadband market share and broadband ARPU is a unique double amongst the
> world's leading incumbent operators.
> They then go on to explain that their "Browse pack numbers are included
> in the figures - again skewing the average.
That doesn't change the case that ARPU is a better guide to money spent, and
therefore "real" cost, than a simple average of plan prices.
To extend the example, today's Telstra ADSL plan prices are $29.95, $39.95,
$59.95, $69.95, $79.95, $89.95, $99.95 and $149.95; the average is about $75.50.
Clearly, since the company's ARPU is (in AUD) $46, there are more users at
$29.95 and $39.95 than at the higher prices.
>> So: the ARPU for the largest ISP in the country is more than
>> US $20 below the "average" subscription price.
> Bull$%^@ !
For heaven's sake read TFP. The OECD number was $56. The ARPU calculation was
$34.50. That's not bulldust, and it's wearying explaining simple maths.
> In fact they are crowing with pride at how high their ARPU actually is.
>> We constantly encourage politicians to seek "OECD position"
>> in broadband policy, which is just nonsense. Moreover, since
>> it's so easy to play "spot the bollocks" in the broadband
>> data, why would I give any better credence to the OECD's
>> education, health, taxation, or any other of its pronouncements?
> Because their economists have actually taken the time to go through the
> figures - deduct the numbers from promotional units and come up with a
> real ARPU.
They did not come up with a "real ARPU". The methodology is set out on the OECD
It is based, as I said, on price for different plans at the advertised speed. In
fact, the OECD uses "promotional units" - the advertised plan price, and that
alone, with no allowance for buying patterns.
Now, across the whole industry, Australia's ARPU might be more than $40 ...
around $30 in USD. So there's no justification for saying, as this will
inevitably be reported, that "Australians pay more than $50 per month" or whatever.
If I wanted a genuine basis of comparison, I would look at:
(Average disposable income (normalised to US dollars) / Industry-wide ARPU by
country (in US dollars))
This could then be expressed as % of disposable income per Mbps.
This would tell us how much of their disposable income people in different OECD
countries have to spend to get access to the Internet, without the artificial
distortions of a silly and inadequate figure.
It would relate the price to the ability to pay, and provide a decent basis for
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