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Broadband pricing in US and Europe falls

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Broadband pricing in Europe and the US fell €5 a month, on average, as broadband speeds went up by an average of 20 per cent during the last year, says researcher Analysys Mason. This is after a relatively flat period during the past recession, when prices held up.

Now the average price paid for a fixed broadband service bundle, which includes any single service or double and triple play bundles, has come down to €40.7 a month. Analysys Mason says that it tracks over 1000 fixed broadband-based bundles in Europe and the USA to track this pricing. Our guess is that this tracking is done on web sites and that these are published prices. In the US, cablecos are well known for using call centers to match rival pricing, going below published prices, so the real number may be far lower.

Martin Scott, Senior Analyst at Analysys Mason said, “Almost 20% of the tariffs we tracked during the second quarter of 2010 offered down- stream bandwidths of 30Mbps 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 Mbps per month has declined from €7.5 in the fourth quarter of 2009 to just €5.8 in the second quarter.” Competition from mobile broadband services contributed to the downward pressure on fixed broadband tariffs, the company said.

But it also warns that the premium which cellular providers charge for mobile broadband services is also eroding. Prepaid mobile broad- band services with usage caps of 3GB or more now undercut entry- level fixed broadband propositions.

Over a six-month period the median price of fixed broadband services, excluding voice and TV services – fell €25.9 a month. When all service bundles are included, it was €40.7, down from €45.8 six months ago.

Copyright © 2010, Faultline

Faultline is published by Rethink Research, a London-based publishing and consulting firm. This weekly newsletter is an assessment of the impact of the week's events in the world of digital media. Faultline is where media meets technology. Subscription details here.

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