Point Topic, a UK telecoms analysts firm, has reported that residential consumer broadband prices per Megabit (Mb) have continued to fall in 2011. The issue is particularly prominent in Latin America, where a price drop of 40% has occurred between Q4 2009 and Q1 2011.

The sharpest falls have come from the new generation of fibre optic broadband ISP services, which offer significantly faster speeds ( 100Mbps+ ). Most related deployments are still in the early stages and as this spreads it will lead to growing competition between suppliers and ISPs, which often results in lower prices.



Many UK consumers might recently have noticed a slightly different trend over this side of the pond. Some big ISPs (e.g. O2) have actually been putting their prices up and well beyond the adjustment needed to reflect an earlier hike in Value Added Tax (VAT) to 20%.

At least part of this can be attributed to the many burdens being placed upon UK internet providers by the government, such as new data retention rules and the Digital Economy Act (DEA) for tackling internet copyright infringement.

Stricter rules on the promotion of broadband speeds and usage allowances will also force some providers to be more realistic about what they can actually deliver. This is particular important at a time when many ISPs are having to cope with soaring demand for online video content. Tougher restrictions or high prices are thus a very real possibility, although Point Topic believes that the weight of competition will ultimately serve to keep prices low.. at least for now.