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Europe and USA Broadband ISP Prices Continue to Fall as Speeds Increase

Posted: 25th Aug, 2010 By: MarkJ
broadband internet statisticsNew Analysys Mason research, which is based upon data obtained from over 1000 fixed broadband bundles in the UK, Europe and USA, reveals that the average monthly price paid (PPP) for a fixed broadband service bundle has fallen by £4.10 (5 Euros) between Q4-2009 and Q2-2010 to £33.42 (40.7 Euros) per month.

Prices might be falling but broadband speeds are still increasing, largely due to the gradual evolution of underlying technology (i.e. ADSL 8Mbps to ADSL2+ 24Mbps) and growing adoption of "super-fast" fibre optic (e.g. FTTC , FTTH etc. ) based solutions. During Q2-2010 nearly 20% of all internet traffic offered download speeds 30Mbps+ (Megabits per second).

Martin Scott, Senior Analyst at Analysys Mason, said:

"Almost 20% of the tariffs we tracked during the second quarter of 2010 offered downstream bandwidths of 30Mbit/s or greater (although the proportion of subscribers that actually take these ultra-fast services is likely to be much lower than 20%). Consequently, the average price per megabit per second has declined from EUR7.5 in the fourth quarter of 2009 to just EUR5.8 in the second quarter of 2010."

Scott claims that the reason for falling prices, which had otherwise remained somewhat stable during the recent financial recession period, is down to competition from Mobile Broadband services.

Scott added:

"Having said that, the premium that providers charge for mobile broadband services is also eroding. Prepaid mobile broadband services with usage caps of 3GB or more (which are sufficient for light users) now undercut entry-level fixed broadband service propositions in terms of price in most Western European countries."

This might be true in other markets, although Mobile Broadband in the UK has suffered due to performance and coverage problems. Instead, most of the pressure still comes from our internal and aggressively competitive ISP market.

We can't think of any major UK ISPs that have expressed concern about Mobile Broadband, although it would still be very unwise to ignore it, especially with some significant improvements coming over the next few years that will boost speed and coverage.

Over a six-month period (to Q2-2010), the median price of fixed broadband services – excluding bundled voice and TV services – has also fallen to £21.30 (EUR25.9) per month.
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