1 Euro Price Drop in Fibre Optic Broadband Can Fuel ISP Subscriber Boom

The latest Q4-2012 internet tariff analysis from Quantum-Web has claimed that an 86p (1 Euro) decline in the price of fibre optic based superfast broadband ISP tariffs can be equated to an increase of over 400,000 new subscribers in Europe between Q4-2009 and the end of last year.

Overall the analyst reported that EU fibre broadband subscribers increased from 12.7 million in Q4-2009 to over 22 million in Q4-2012, while the average residential tariff for fibre broadband fell from £51 (€59) to £30 (€35) over the same period.

According to Qmars Safikhani, Quantum-Web’s Head of Analytical Research, “We have observed high elasticity of fibre broadband demand of 1.85” meaning that a 1 Euro decline in prices causes an increase of over 400,000 new fibre subscribers in Europe since the fourth quarter of 2009.”

It should be said that expanding coverage has also played a huge part in supporting the increased uptake because related technologies are currently still being deployed and have thus not started from a position of mass availability. Availability must always come first.

Quantum-Web’s full report also revealed that Europe continues to remain one of the cheapest places in the world for both fixed line and Mobile Broadband packages alike. The average price of a standalone fixed line broadband ISP package in Europe is £24 per month (€28.01), which jumps to £47 (€54.74) for a similar service in “the world’s most expensive region” of Latin America. Other studies have also shown that the UK is one of the cheapest EU states for broadband.

It’s also interesting to note that the global average price gap between capped and uncapped (i.e. unmetered / unlimited) residential standalone fixed line broadband tariffs is around £4.80 (€5.60) and this varies region by region. North America and Africa are the only regions where capped packages are more expensive than uncapped ones.

Elsewhere Europe is beaten only by the Asia Pacific region for affordability of Mobile Broadband. Consumers in Europe will typically pay £8.2 per GigaByte (€10.1) of mobile data, while the most expensive region is once again Latin America where 1GB costs an average of £14.7 (€17).

Overall Europe has the “world’s highest broadband penetration” and also offers the cheapest fixed broadband tariffs, albeit falling a little short of the crown with mobile data. Apparently Romania and Belarus have the lowest average broadband prices in the EU, charging just €6.41 and €9.44 respectively, although it’s not clear what those packages included (speed, usage etc.).