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Cutting Broadband Prices by 1 Percent Could Help 5 Million Homes Get Online

Posted: 27th Oct, 2011 By: MarkJ
broadband money statisticspoint topicTelecoms analyst firm Point Topic UK has claimed that the biggest barrier to broadband adoption is still affordability. It estimates that 5 million more households around the world could afford broadband if the price was cut by just 1%.

Point Topic CEO, Oliver Johnson, explained:

"The next wave of broadband, commonly titled ‘superfast’, is gathering steam. With more than half a billion fixed lines already in use and many markets extending the reach of fixed broadband across their populations, the spectre of a deepening digital divide rears its head.

On a global basis, if suppliers can shave 1% off the cost of a broadband service then that brings it into the economic reach of at least another five million households."

On top of that Point Topic has also called for a wider effort to improve industry standards, such as for GPON (Gigabit Passive Optical Network) technology.

Johnson continued:

"The work that standards bodies around the world are doing on certification is a core element in bringing broadband to more people. [However] standards are [just] one component of bringing down the price of a broadband service. Competition, information and technological advances all make a difference.

It’s way too early to say we’ve solved the availability issue for broadband. There are still plenty of countries with lower penetration than you’d want to see. That said, the majority of those countries are where broadband services, even when they go past the front door, are not in households because they can’t afford it. Even in ‘mature’ and relatively rich broadband markets there are significant shortfalls in take-up due to the cost of a subscription and the kit that goes with it."

It should be said that Point Topic is speaking on a global scale, while prices in the UK are already very competitive. Indeed many of our home broadband providers are under mounting pressure from new rules and regulations that could actually push prices up rather than down. Still, to be a mass market success, superfast broadband services will at some point need to become cheaper.
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