Prices per Mbps continue to diminish, says Point Topic

Residential consumer broadband prices per Mbps have continued to fall in 2011, particularly in the Americas, while the rise of fibre-based services means there will be no respite in the pressure for ISPs to offer more value, according to a new report from research firm Point Topic.

The cost per Mbps is reported to have declined across all regions between the final quarter of 2009 and the first quarter of 2011, according to the report, but a significant 40 per cent price drop has been seen in Latin America, followed closely by North America and Canada at 35 per cent across all access technologies.

Downward pressure on the price of bandwidth is believed to be constant, with consumers wanting more for their money and suppliers often finding themselves in competitive marketplaces where the challenge comes from other technologies as well as other companies.

“Consumers still perceive speed, or downstream bandwidth to be more precise, as a significant factor in their decision making,” said Fiona Vanier, senior analyst at Point Topic. “This works up to a point. There is evidence that residential consumers in particular are having difficulty imagining what they can do with more than 50Mbps today and their purchasing decisions are not driven by bandwidth as much as they used to be.”

As fibre broadband networks continue to pass more and more homes, there is not expected to be any easing in the pressure for ISPs to offer more value to their customers:  “It will prove increasingly difficult to differentiate yourself as a broadband supplier based just on higher and higher headline bandwidths,” added Vanier. “The mature broadband markets in particular are entering a phase where value-added services and customer relationships will be more and more important. The downside is that consumers could be seeing the end of significant increases in bandwidth or reductions in tariffs.”


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