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Global Broadband Prices Rise for Faster Next Gen Internet Access

Posted: 03rd Feb, 2010 By: MarkJ
point topicAnalyst firm Point Topic has revealed that the amount consumers pay for 1Mbps (1Megabit per second) of broadband bandwidth (speed) is still on a downward trend, albeit decreasing more slowly than before. However the price is quietly rising for consumers who adopt faster next generation broadband services.

According to the data, DSL ( ADSL , SDSL etc. ) prices per megabit have dropped by almost 30% in the 12 months from Q4 2008 to Q4 2009, cable by just over 23% while the bandwidth cost of fibre has increased by 2.1% in the same period.

q4 2009 price for 1megabit per second of broadband

Fiona Vanier, Senior Analyst at Point Topic, said:

"Competition between operators and across the technologies is continuing the downward pressure on DSL and cable pricing per megabit. Fiber however doesn’t have to work quite so hard. Partly because it’s a relative newcomer in many markets but even where it’s established FTTx offers such good value for money, on this measure at least, that it has some breathing space.

Operators have overall been raising prices of the entry level services they offer in the last few months, particularly for DSL. They have achieved an overall reduction in the price per megabit by increasing speeds or at least the headline speeds they quote for the services.

It should be noted these calculations are based on the advertised speed and not what the consumer actually experiences. A number of factors can reduce the bandwidth available, contention being a leading example, so the drop in bandwidth costs may not be as dramatic as the raw data suggests."

It's also interesting to see how broadband prices break-up by region. For example, 1Mbps of DSL bandwidth is 6 times more expensive in the Middle East and Africa compared to Asia Pacific, while fibre ( FTTH etc. ) costs twice as much per Megabit in North America as it does in Western Europe.

broadband prices by region q4 2009

Markets with a high level of competition (service as opposed to infrastructure competition) naturally offer relatively low broadband prices. The UK is known to be one of the world’s most affordable broadband markets. Indeed new 40Mbps and 50Mbps services from both BT ( FTTC ) and Virgin Media ( Cable Modem ) respectively are already showing that faster speeds don't have to come at a huge premium.
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