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The Average Cost Per Megabit by Broadband ISP Technology for 2012

Posted Thursday, February 28th, 2013 (8:58 am) by Mark Jackson (Score 2,159)
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Point Topic UK has published its latest Q4-2012 analysis of global standalone and bundled broadband tariffs, which found that residential consumers in Western Europe pay the lowest for cable broadband based ISP services. But consumers in the Asia-Pacific region still get the best deal for fibre optic (e.g. FTTH) and older DSL services.

Globally the average monthly charge for residential broadband services in Q4-2012 was £48 ($72.52) and the average advertised connection speed provided by residential services was 36Mbps (Megabits per second). As a result the telecoms analyst concludes that the average global cost per megabit (Mb) was just over £1.32 ($2) at the end of last year.

Prices for the most common form of copper based fixed line connectivity, DSL, have been up and down like a yo-yo but it remains the most expensive technology in terms of the average cost per megabit. By comparison the faster cable and fibre services deliver more speed for a lower comparative price, although only cable has seen a steady decline in price.

average global cost per broadband megabit over time 2012

It’s interesting to see how this pricing is broken down when the data is split up into different parts of the world. In particular we note that the new generation of superfast fibre optic (FTTP/H etc.) broadband products in Western Europe are almost as cheap as they are in the Asia-Pacific region, albeit perhaps for different reasons.

A number of Asia-Pacific markets, such as South Korea, already have mature fibre competition and coverage, which has helped to drive prices down. By comparison Europe is still struggling with FTTH, both in terms of availability and uptake, thus its pricing could perhaps be seen as both a reflection of the threat from an aggressively competitive DSL market and the desire to push uptake.

average global cost per broadband megabit q4 2012

Unfortunately Point Topic’s free analysis doesn’t split the “Fibre” technologies up so that we can see how hybrid-fibre (FTTC / VDSL) compares with true fibre (FTTH / FTTP) services. But the slower hybrid solutions (speeds tend to hit around 100Mbps at best) are known to dominate in Europe.

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,” said Point Topic.

Separately Point Topic has also produced similar data for business broadband services, which tend to be dominated by DSL and Fibre solutions in Western Europe where related prices are around four times higher per megabit than their domestic counterparts. But curiously business based cable broadband in Western Europe is only slightly higher than the domestic equivalent (here).

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3 Responses
  1. Ignitionnet

    ‘“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,” said Point Topic.’

    There’s a concern that, having had FTTC subsidised by BDUK and other schemes, BT will be tapping the taxpayer to complete the fibre build.

    In fact it’s more than a concern, it’s a question of time really.

    • Agree, it’s already happening. Openreach declared (BBC RADIO 4 DEC 13th/16th) a VDSL Cab/path for £100k (£60-70k subsidy) a rural ransom via BDUK. FOD also priced for publicly funded vouchers. Public subsidies have climbed from £70 per premise past in Northern Ireland to > £250 per premise passed in Surrey for FTTC.

      Ofcom Business Connectivity review, WLA/WBA review and annual plan do not reference more competition via infrastructure sharing.

      Ofcom need to be called upon to change BT UNdertakings to get the cost scrutiny needed where state aid is present, so VFN can be achieved.

      FTTP needs a 25 year view, Ofcom is restricted to 4 year in their market reviews, while BDUK procures whats available today.

      Unfortunately, the appearance of the £100k Cab/path ransom, unrelated to any version of reality demands a re-set button.

    • DTMark

      “There’s a concern that, having had FTTC subsidised by BDUK and other schemes, BT will be tapping the taxpayer to complete the fibre build.”

      Indeed, I suggested a while back that eventually, some form of voucher scheme would be introduced towards payment for “Fibre on Demand”.

      At the end of this, we’ll have the most expensive possible fibre rollout with the smallest possible choice of infra providers.

      Almost as if it had been planned this way.

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