Global bandwidth costs continue to fall in 2011

June 7, 2011   |   Oliver Johnson

Global bandwidth costs continue to decrease

Residential consumer broadband prices per megabit have continued to fall in 2011, particularly across the Americas, according to the latest broadband tariff analysis from Point Topic.

Regional pricing for the three main fixed line technologies – DSL, cable and fibre – between the world’s regions over a period of 15 months are compared in the report, from Q4 2009 to Q1 2011. The cost per megabit has declined across all regions but a significant 40% price drop has been seen across Latin America, followed closely by North America and Canada at 35% across all technologies.

Cost per megabit by technology and region

Figure 1: Cost per megabit by technology and region – Q4 2009 and Q1 2011

 

“We can see from the data that of course some markets are changing more rapidly than others. They tend to be where there might have been more margins in the original pricing or the operators are significantly out of step with what their competitors have managed to put together,” said Fiona Vanier, Senior Analyst at Point Topic.

Downward pressure on the cost of bandwidth is constant. Consumers want more for their money and suppliers are often in competitive market places where the challenge comes from other technologies as well as other companies.

DSL Q409 – Q111 % Change Cable Q409 – Q111 % Change Fibre Q409 – Q111 % Change
South & East Asia

-39.1%

-64.9%

Asia Pacific

-7.3%

-0.4%

-49.7%

Latin America

-28.6%

-46.1%

-48.1%

North America & Canada

-42.6%

-22.4%

-40.0%

Western Europe

-16.7%

-28.4%

-32.5%

Eastern Europe

-26.4%

-23.7%

-26.2%

Middle East & Africa

-6.1%

-14.0%

Figure 2: % change in price per megabit by region and technology
Figure 3: Chart of % change in price per megabit by region and technology

Figure 3: Chart of % change in price per megabit by region and technology

“The price per megabit of bandwidth in Latin America has dropped by an average of over 40% and in North America and Canada by over 35% across all the fixed line technologies.  This isn’t about significant reductions in the monthly subscription but about increases in the headline speed on offer,” said Vanier.

“Consumers still perceive speed, or downstream bandwidth to be more precise, as a significant factor in their decision making. This works up to a point. There is evidence that residential consumers in particular are having difficulty imagining what they can do with more than 50Mbps today and their purchasing decisions are not driven by bandwidth as much as they used to be.”

As fibre continues to pass more and more homes there will be no let-up in the pressure for ISPs to offer more for the consumers’ money.

“It will prove increasingly difficult to differentiate yourself as a broadband supplier based just on higher and higher headline bandwidths. The mature broadband markets in particular are entering a phase where value added services and customer relationships will be more and more important. The downside is that consumers could be seeing the end of significant increases in bandwidth or reductions in tariffs,” concluded Vanier.

About Point Topic

Point Topic is the primary websource for DSL, FTTx, cable and other broadband supplier and user statistics, databases, information and reports. Its data is in use worldwide amongst governments, commercial organisations and as general reference.  A range of online services provides the most up-to-date, accurate and cost effective worldwide and UK specific broadband data sets available.

The Broadband Tariff Benchmark Short Report Q1 2011 is available to registrants on the Point Topic site (www.point-topic.com).  Data for this analysis was taken from the full version of the report with additional data from the Operator Source and Global Broadband Statistics services.

For media information please contact Proactive PR Account Manager Liz Dolby at liz.dolby@proactive-pr.com or on: +44 1636 812152 (office) or +44 7966 477441 (mobile).

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