Residential broadband tariff benchmarks – Q1 2013

Global and regional benchmarks for residential broadband services

This free report provides global and regional benchmarks for residential broadband tariffs and the average downstream bandwidth offered by copper, cable and fibre services at the end of March 2013.

Every quarter, Point Topic looks at trends in the global and regional monthly costs of copper (DSL), cable and fibre broadband services.

The analysis is based on our global database of standalone and bundled broadband tariffs. In Q1 2013, the database included 2,889 residential tariffs from across the globe and 2,310 business tariffs.

Within this report, we look at the global and regional trends for residential broadband tariffs. All prices are quoted in international US dollars at PPP rates to allow comparisons between countries.

The global picture

In Q1 2013, the average monthly charge for residential broadband services was $73.29. The average bandwidth provided by residential services was 36.3Mbps. This means that the average global cost per megabit was just over $2 at the end of March 2013.

 

average cost per megabit Q1 2013

The key factor that affects this metric is the bandwidth offered by the different technologies. Monthly subscription charges for all three services are comparable (although fibre remains the most expensive service).

The cost per megabit for fibre and cable residential broadband services was comparable at $1.14 and $1.53 respectively. Copper is much more expensive for residents, given the bandwidth that they can expect to receive. The average global cost per megabit for residential copper broadband services was $5.57 in Q1 2013.

Copper continues to be central to the networks in many regions. Despite the decline in subscribers in some mature markets for plain DSL  (but not VDSL) services and many ISPs moving away from end-to-end copper, its role in delivering FTTx in the local loop (VDSL) will mean that copper will still be in the ground for many years to come.

End-to-end copper will increasingly be focused in areas that have poor infrastructure and competition and low upgrade potential, meaning that operators are able to charge a relative premium which drives up the average tariff. In areas where DSL faces more competition the tariffs tend to be lower than for either cable or fibre – pitched at the more entry level, low data volume users. However, at the regional level, copper is still the most expensive technology in all regions.

Regional trends

Within this section, we look at the average monthly charge and the average downstream bandwidth offered by residential broadband services across the world in Q1 2013.

residential tariff benchmarks Q1 2013 

Asia-Pacific offers, on average, the fastest broadband services, as in the case of business segment. The average bandwidth was further increased by countries such as Japan launching a 2Gbps residential fibre service. The prices for residential services in Asia-Pacific are among the lowest, whereas in the case of business services the prices were mid-range in this region compared to other regions. This once again confirms that countries like Japan are leading in terms of “value for money” on residential broadband.

There has been little shift since the last quarter, but in the coming quarters we expect to see bandwidths to continue to increase in most mature markets, as we also wait for the South American and MEA regions start offering higher bandwidth tariffs as primarily fibre based deployments make their way to market.

Within the last year, the speeds offered by residential services in Western Europe and North America have increased, as the deployment of higher speed solutions reaches more of their markets. This is a stage that much of Asia has already undergone, and to an extent Eastern Europe, which joined the race later and hence was able to focus on more advanced technologies at the outset. The average price for residential broadband is comparable in Asia-Pacific and Europe.

The next major shift will happen in Western Europe and North America when mass consumer gigabit services come online. These developments aren’t expected in North America until next year, and possibly as late as 3-5 years in Western Europe. Some countries of Eastern Europe are already offering gigabit broadband for residential customers, although at rather high prices.

Regional technology trends

Here, we show a comparison of the average tariffs offered by region for copper, cable and fibre residential broadband services.

average cost per megabit by technology Q1 2013

It is interesting to note that Western Europe – where FTTH/P has failed to gain much of a foothold – continues to offer the lowest average PPP tariff for fibre, most often for a hybrid solution. Western Europe comes second only to Asia-Pacific in terms of the average cost per megabit for residential fibre services.

It remains to be seen whether this position can be maintained. One of the major criticisms of the Western Europe hybrid approach is that beyond 100Mbps supply will be very difficult and expensive. Western Europe may be forced into a second fibre build out earlier than expected, or will find themselves within the slow lane in 3-5 years time.

Similarly to the business segment, copper based residential services are most expensive in Latin America, Middle East and Africa, and South and East Asia. In most countries of these regions customers still have a limited choice of alternative technologies, so have to pay a premium price for legacy broadband due to a lack of competition.

Find out more

The full version of this report is available to subscribers of Point Topic’s Broadband Operators & Tariffs service. To find out more, please telephone +44 (0)20 3301 3303 or e-mail toby.french@point-topic.com.