From a conceptual point of view, it appears wholly appropriate to consider the effect of price-elasticity of demand when calculating the additional net annual value derived from the provision of discounts offered to retirees and pensioners.
In practical terms, however, the acute limitations in terms of the availability of relevant historical data on actual FTS consumption, as well as other context variables, suggest that, even while it remains possible to conduct a study on price-elasticity of demand among PTC's retiree and pensioner customers using actual consumption, such a study would have little validity.
Meanwhile, a study on the price-elasticity of demand among retiree and pensioner customers of PTC using survey data would, likewise, be of limited usefulness, insofar as, given a range of factors, and especially (a) the period of time elapsing between the time of consumption and the time of conducting the survey; (b) the significant difference between the current social and economic climate and the less pessimistic situation prevailing at the time consumption occurred; (c) the potential shortcomings in the extent to which a sample could be representative of the target universe; and (d) the difficulty which the average consumer has in formulating a perception associated specifically with the price-elasticity of demand for access, given the close and instrumental link between access and consumption of calls, the credibility of such an exercise would be questionable.
Nevertheless, from a conceptual point of view, it is considered that this approach is feasible in circumstances when the survey is used to estimate the current behaviours of retiree and pensioner customers in the period during which the survey is actually conducted.
As such, in this case and given the different types of limitations which have been identified, and also given the inherent subjectivity of the results of the estimates and the simultaneous requirement for robust results, it is not clear that conducting a study on the price-elasticity of demand among retiree and pensioner customers would produce results that are any more reliable than the results achieved through an approach based on "benchmarking".
Therefore, following the methodology of "benchmarking" already identified in ICP-ANACOM determination of 09.06.2011, with the improvements suggested herein, a weighted average is derived from the midpoints of the ranges of price elasticity of demand. This method gives a value of -0.098, which is a result deemed more robust and methodologically more consistent than the one identified in the determination of 09.06.2010.
