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Ultra-fast broadband prices fall to a new low in Europe and the USA

17 февраля 2011

Service providers must articulate the benefits of ultra-fast broadband clearly to consumers if they are to stimulate significant take-up of the services at a price premium.

The median price of ultra-fast broadband (which Analysys Mason defines as 30Mbit/s downstream or faster) fell below EUR50 per month in Europe and the USA for the first time in the fourth quarter of 2010, according to the latest research published in our report Triple-play pricing study 4Q 2010: are telcos falling behind? The price premium for ultra-fast broadband is also shrinking – services of 30Mbit/s and faster were just 18% more expensive than the median price of all fixed broadband services across Europe and the USA in the fourth quarter of 2010.

Two factors have driven this decline:

  • The commoditisation of higher-speed broadband in countries where the service has been available for a number of years: second and third operators are also offering high speeds, which has driven the price down.
  • Technological advancement: for operators, the cost per home passed has declined as next-generation technology and government policy have matured, enabling new entrants to offer ultra-fast broadband at lower initial prices than services launched two years ago.

Results from our Connected Consumer survey indicate that many consumers are unsure of the benefit of ultra-fast broadband services. Nonetheless, 24% of the European broadband packages tracked in our pricing study offered access speeds of 30Mbit/s or more in the fourth quarter of 2010. Service providers must articulate the benefits of ultra-fast broadband more clearly to consumers if they are to stimulate significant take-up of the services at a price premium.

Figure 1: Comparison of the median price of different types of fixed broadband service bundle for a typical user, Europe and the USA, 4Q 2008–4Q 2010 [Source: Analysys Mason, 2011]

The price per megabit per second for fixed broadband also continues to fall apace. It fell from EUR7.5 in the fourth quarter of 2009 to EUR4.9 in the fourth quarter of 2010. At the far end of the scale, European broadband services are now available for as little as EUR0.075 per megabit per second. Romanian incumbent Romtelecom offers a 100Mbit/s broadband service that costs just EUR7.52 per month.

Tele2 in Sweden offers a 1Gbit/s residential fixed broadband service for EUR87.95 per month. This makes Sweden the only Western European country in the top-ten cheapest operators in Europe and the USA, in terms of price per megabit per second.

Table 1: Ten least-expensive services by price per megabit per second, Europe and the USA, 4Q 2010 [Source: Analysys Mason, 2011]

Service provider

Country

Most-competitive package

Price per Mbit/s

Romtelecom

Romania

ClickNet Power (100Mbit/s)

0.075

Tele2

Sweden

Bredband via datauttaget 1000 Mbit

0.088

Vega

Ukraine

Unlimited 100 (Kiev only)

0.103

RCS/RDS

Romania

Fiber Link Tarifar 2 (100Mbit/s)

0.104

Lattelekom

Latvia

Internets 4-optika (200Mbit/s)

0.106

Telia

Sweden

Telia Bredband Fiberlan 1000 Mbit/s

0.110

Balticum TV

Lithuania

Optical Internet 100/5

0.114

Volia

Ukraine

Absolute (with Volia Premium TV; 150Mbit/s)

0.123

Baltkom

Latvia

NGN Zelts (100Mbit/s)

0.129

Zebra (TEO LT)

Lithuania

Zebra - Mega šviesolaidis (200Mbit/s)

0.145

 

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