5 ms·

> But the fact that it only costs 9 cents a GB is amazing. 9cents in India would be equivalent to 1.91 USD after taking into account Purchasing Power Parity (O

> But the fact that it only costs 9 cents a GB is amazing. 9cents in India would be equivalent to 1.91 USD after taking into account Purchasing Power Parity (OECD 2019). Therefore, you are in effect saying 1.91 USD per GB is amazing. You can not compare values without including purchasing power disparities.

deleted 6y ago
[deleted]
shripadk 6y ago
PPP makes no sense when it comes to comparing data usage between countries. Data is not based on same supply/demand characteristics as physical goods. It is quite literally arbitrary. Much like most software you buy/subscribe to. Ever bought a digital product at 90% discount during Black Friday or Cyber Monday? Why don't you find physical products with 90% discounts (unless it is a clearance sale)? Because you can't discount cost involved in acquiring raw materials and labour cost. Digital products on the other hand can be duplicated infinite times with zero additional cost. So is anything connected to it (which includes data, storage and processing). Sure there is some cost involved. But at scale that cost becomes negligible. You can't produce physical products at scale without the cost also scaling proportionally. Even in India, before Jio made its entry, data was extremely expensive. Horrible speeds, very low data limits and no competitive pricing (you can say that it was a data cartel of sorts). Jio disrupted the entire sector. All ISPs reduced prices overnight. How could they do it? Wouldn't it hit their bottom line? Nope! They never went into loss in the first place. They charged exorbitant rates because they could. Not because there was some basis for it. That monopoly was disrupted. That is all there is to it. And with a billion+ people in the country, ISPs will never go under loss for selling data for few cents - a dollar. Rather, they are probably making more than they ever did. Jio showed them the way to price correctly.
- tchalla 6y ago
  > PPP makes no sense when it comes to comparing data usage between countries. We are not comparing data usage, we are comparing the value of two different currencies. The value of 100 US$ in India is different from that in the US or the EU. In order to normalise the value between two currencies, PPP is used. It doesn't matter what the 100US$ is spent on, data or food.
  - shripadk 6y ago
    > We are not comparing data usage, we are comparing the value of two different currencies. The value of 100 US$ in India is different from that in the US or the EU. In order to normalise the value between two currencies, PPP is used. It doesn't matter what the 100US$ is spent on, data or food. But you are comparing value of currencies by comparing two equal goods. That would mean also comparing acquisition of raw materials, labour costs, import/export of goods, availability of resources etc which is never going to be the same. PPP itself has shortcomings (you can read them here: https://www.yourarticlelibrary.com/international-trade/15-criticisms-against-the-ppp-theory-with-figure-international-trade/26060 https://www.yourarticlelibrary.com/international-trade/15-cr...). For example, India might have abundance of rice while USA might have shortage of rice. But rice is used for making noodles in both countries and demand for rice is equivalent in both countries. Would you price it according to PPP index? Nope. You take into account any tariffs imposed by host country. What about transport? What about labour costs? There are so many variables that can influence the pricing of a product. PPP is a bad way to judge cost of living and cost of goods/services. If PPP is 21.3 (2019 data) between USA and India, a Harley Davidson in India should be 21.3 times cheaper than a Harley Davidson in USA. It isn't. The cost is pretty much the same. So is the case with iPhones. Even if iPhones are manufactured in India it would still cost slightly less than in USA. It will never be 21.3 times cheaper. Also, let us take Big Mac Index into account. It was a humorous take on PPP devised by economists to compare the costs of a Big Mac between countries (as McDonalds maintained standards between countries). Now the cost of a Big Mac in India and a Big Mac in US might not reflect the true PPP of the country because it all depends on the appetite of Indians for a Big Mac. We are avid consumers of street food. Street food for us is what is McDonalds for Americans. Now how can you make McDonalds as a standard for the World when in my part of the World a tiny percentage of the population visits McDonalds to consume their delicious burgers while a large percentage eats street food? Wouldn't that obviously influence the price of a McDonalds burger in India as the demand for it is next to non-existent? Now let me reverse the case and say that India tomorrow undergoes a massive cultural change and everyone shifts from eating street food to eating at a McDonalds burger joint. What would the price of a Big Mac in India be then? Obviously with high demand the cost falls rapidly. PPP should blow up right? But does that truly reflect the standard of living between two countries? That is a food for thought for you.
RIMR 6y ago
PPP should not have this kind of effect over a renewable globalized asset like data.
- iguy 6y ago
  It's messy right? I mean you aren't buying global data, you are buying data delivered in a particular town. Some of the costs of providing it are all about the location (e.g. renting land to put up towers) and some aren't at all (e.g. the networking hardware), so it still seems very impressive that they can do it this cheaply.
- tchalla 6y ago
  You can not simply compare a good in two different currencies without normalisation for disposable income, value and purchasing power. The value of 100$ in India is different than in the US. So obviously, some things in India will be cheap in $$$. You have to normalise on some metric. I chose PPP which is not perfect. If you do not like it, you can choose another reasonable one.
jagmal 6y ago
I believe it would be ~9 * 3.5(i.e. fx_rate/ppp)= ~31.5 cents and not 1.91 USD.
- iamgopal 6y ago
  Only thing no one in the world can beat Indians at, is at calculating money cost and profits.
  - prudhvis 6y ago
    Growing up in poverty and seeing it all around you will do that to people. It's not a special thing that Indians only possess.
sharadov 6y ago
PPP makes no sense, I know economists use it all the time, but some goods are expensive and some are not across countries - food is cheap in India, there are massive subsidies around it. Anything imported is expensive - cars, electronics, foreign liquor. It's cheap and it's continuing to drop. And it's in no way $1.91 from an Indian perspective.
jimmaswell 6y ago
I'd take $1.91 per GB for phones. I don't use that much mobile data so it's not a big deal but it's $10/GB for me on Tracfone.

deleted 6y ago

[deleted]

shripadk 6y ago

PPP makes no sense when it comes to comparing data usage between countries. Data is not based on same supply/demand characteristics as physical goods. It is quite literally arbitrary. Much like most software you buy/subscribe to. Ever bought a digital product at 90% discount during Black Friday or Cyber Monday? Why don't you find physical products with 90% discounts (unless it is a clearance sale)? Because you can't discount cost involved in acquiring raw materials and labour cost. Digital products on the other hand can be duplicated infinite times with zero additional cost. So is anything connected to it (which includes data, storage and processing). Sure there is some cost involved. But at scale that cost becomes negligible. You can't produce physical products at scale without the cost also scaling proportionally. Even in India, before Jio made its entry, data was extremely expensive. Horrible speeds, very low data limits and no competitive pricing (you can say that it was a data cartel of sorts). Jio disrupted the entire sector. All ISPs reduced prices overnight. How could they do it? Wouldn't it hit their bottom line? Nope! They never went into loss in the first place. They charged exorbitant rates because they could. Not because there was some basis for it. That monopoly was disrupted. That is all there is to it. And with a billion+ people in the country, ISPs will never go under loss for selling data for few cents - a dollar. Rather, they are probably making more than they ever did. Jio showed them the way to price correctly.

tchalla 6y ago
> PPP makes no sense when it comes to comparing data usage between countries. We are not comparing data usage, we are comparing the value of two different currencies. The value of 100 US$ in India is different from that in the US or the EU. In order to normalise the value between two currencies, PPP is used. It doesn't matter what the 100US$ is spent on, data or food.
- shripadk 6y ago
  > We are not comparing data usage, we are comparing the value of two different currencies. The value of 100 US$ in India is different from that in the US or the EU. In order to normalise the value between two currencies, PPP is used. It doesn't matter what the 100US$ is spent on, data or food. But you are comparing value of currencies by comparing two equal goods. That would mean also comparing acquisition of raw materials, labour costs, import/export of goods, availability of resources etc which is never going to be the same. PPP itself has shortcomings (you can read them here: https://www.yourarticlelibrary.com/international-trade/15-criticisms-against-the-ppp-theory-with-figure-international-trade/26060 https://www.yourarticlelibrary.com/international-trade/15-cr...). For example, India might have abundance of rice while USA might have shortage of rice. But rice is used for making noodles in both countries and demand for rice is equivalent in both countries. Would you price it according to PPP index? Nope. You take into account any tariffs imposed by host country. What about transport? What about labour costs? There are so many variables that can influence the pricing of a product. PPP is a bad way to judge cost of living and cost of goods/services. If PPP is 21.3 (2019 data) between USA and India, a Harley Davidson in India should be 21.3 times cheaper than a Harley Davidson in USA. It isn't. The cost is pretty much the same. So is the case with iPhones. Even if iPhones are manufactured in India it would still cost slightly less than in USA. It will never be 21.3 times cheaper. Also, let us take Big Mac Index into account. It was a humorous take on PPP devised by economists to compare the costs of a Big Mac between countries (as McDonalds maintained standards between countries). Now the cost of a Big Mac in India and a Big Mac in US might not reflect the true PPP of the country because it all depends on the appetite of Indians for a Big Mac. We are avid consumers of street food. Street food for us is what is McDonalds for Americans. Now how can you make McDonalds as a standard for the World when in my part of the World a tiny percentage of the population visits McDonalds to consume their delicious burgers while a large percentage eats street food? Wouldn't that obviously influence the price of a McDonalds burger in India as the demand for it is next to non-existent? Now let me reverse the case and say that India tomorrow undergoes a massive cultural change and everyone shifts from eating street food to eating at a McDonalds burger joint. What would the price of a Big Mac in India be then? Obviously with high demand the cost falls rapidly. PPP should blow up right? But does that truly reflect the standard of living between two countries? That is a food for thought for you.

RIMR 6y ago

PPP should not have this kind of effect over a renewable globalized asset like data.

iguy 6y ago
It's messy right? I mean you aren't buying global data, you are buying data delivered in a particular town. Some of the costs of providing it are all about the location (e.g. renting land to put up towers) and some aren't at all (e.g. the networking hardware), so it still seems very impressive that they can do it this cheaply.
tchalla 6y ago
You can not simply compare a good in two different currencies without normalisation for disposable income, value and purchasing power. The value of 100$ in India is different than in the US. So obviously, some things in India will be cheap in $$$. You have to normalise on some metric. I chose PPP which is not perfect. If you do not like it, you can choose another reasonable one.

jagmal 6y ago

I believe it would be ~9 * 3.5(i.e. fx_rate/ppp)= ~31.5 cents and not 1.91 USD.

iamgopal 6y ago
Only thing no one in the world can beat Indians at, is at calculating money cost and profits.
- prudhvis 6y ago
  Growing up in poverty and seeing it all around you will do that to people. It's not a special thing that Indians only possess.

sharadov 6y ago

PPP makes no sense, I know economists use it all the time, but some goods are expensive and some are not across countries - food is cheap in India, there are massive subsidies around it. Anything imported is expensive - cars, electronics, foreign liquor. It's cheap and it's continuing to drop. And it's in no way $1.91 from an Indian perspective.

jimmaswell 6y ago

I'd take $1.91 per GB for phones. I don't use that much mobile data so it's not a big deal but it's $10/GB for me on Tracfone.