Tariffs and the affordability gap in mobile telephone services in Latin America and the Caribbea

Abstract

Since 2007, the Regional Dialogue on the Information Society (DIRSI) has periodically compiled information about mobile telephony tariffs in the main markets in Latin America and the Caribbean, using the basket of mobile services methodology developed by the Organization for Economic Cooperation and Development (OECD). The purpose is to monitor tariff trends as markets mature and estimate the affordability of the service for lower-income users. This estimation is crucial for the design of universal access strategies, because the level of affordability determines the boundary of market efficiency. Without empirical analysis of the affordability of services, it is impossible to determine which markets are commercially viable without the need for subsidies. The goal, therefore, is to support the design of public policies that expand the market boundary while minimizing the public subsidy needed.