Report: Broadband an improving value

Fri, 06/05/2009 - 9:25am
Brian Santo

Consumer groups continue to squawk about video prices, but broadband is demonstrably an increasingly good deal, with the cost per megabit gradually lessening for cable and dropping somewhat more rapidly for DSL.

Operators worldwide have slowly increased in speed, and even in the face of a recession, some providers are cutting prices, according to data collated and published by Point Topic.

“Since the start of 2008, the watchword seems to have been consolidation. Even before the credit crunch, many operators, particularly those offering DSL, were trying to stabilize their business models as their markets moved on to a phase where rapid growth could no longer be counted on to cover holes in their balance sheets,” says Fiona Vanier, senior analyst at Point Topic.

Price cutting was apparently a temporary tactic, however, aimed at customer acquisition. That activity has slowed, and operators shifted their focus to reducing churn.

One effect of this has seen speeds being offered worldwide gradually increasing as the ISPs get to grips with their networks and consumers become better educated, and therefore more demanding, according to Point Topic. As a result, the price per megabit has dropped by about 20 percent for fiber, 30 percent for cable and 37.5 percent for DSL in the 12 months Q108 to Q109.

Point Topic cautions that the chart tracks operators worldwide, and the chart may be affected by fluctuations in exchange rates.

Vanier explained: “There are a patchwork of interactions around the world. In markets where there is competition between technologies, there is downward pressure on prices, but ISPs are also starting to pitch to different markets and differentiate their offerings. DSL tends to be an entry-level option for the day-to-day user, while cable companies are taking advantage of their speed edge over copper where they have the infrastructure and have upgraded their technology.”

More Broadband Direct 06/05/09:
•  SeaChange rolls to 7th consecutive quarter of profitability
•  ACA asks FCC to freeze fees for smallest ops
•  Qwest long-distance network getting low-balled
•  CenturyTel wraps Embarq purchase
•  SCTE seeks nominees for Learning and Development Award
•  Report: Broadband an improving value
•  Report: IPTV set-top boxes cooling off
•  Palm Pre plays hard to get
•  Power-sipping cell phone displays come closer
•  Stock market pares gains after jobs report
•  Broadband Briefs for 06/05/09




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