Following 18 months of relative stability during the recession, competition is once again driving a reduction in prices in the European fixed broadband market. The average price paid for a fixed broadband service bundle (that is, a single-, double- or triple-play package) has declined by about EUR5 between the fourth quarter of 2009 and the second quarter of 2010 to EUR40.7 per month (PPP). This data comes from Analysys Mason’s Triple-play pricing study, which tracks more than 1000 fixed broadband-based bundles in Europe and the USA.
By contrast, access speeds continue to increase. Almost 20% of the tariffs we tracked during the second quarter of 2010 offered downstream bandwidths of 30Mbit/s 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 megabit per second has declined from EUR7.5 in the fourth quarter of 2009 to just EUR5.8 in the second quarter of 2010 (see Figure 1). Some service providers, such as Romtelecom in Romania, offer services at a rate as low as EUR0.1 per megabit per second.
Figure 1: Unweighted mean price per megabit per second for residential fixed broadband access, 2003–2Q 2010 [Source: Analysys Mason, 2010]
Other conclusions from the latest version of the study, Triple-play pricing study 2Q 2010: price competition returns, include:
- Service providers continue to charge a 24% premium for bundles that include a broadband service with a downstream speed of 30Mbit/s or greater. This ultra-fast broadband premium has remained steady over the first half of 2010, despite an overall decline in the price of fixed broadband bundles in Europe.
- Competition from mobile broadband services contributed to the downward pressure on fixed broadband tariffs during the first half of 2010. However, the premium that providers charge for mobile broadband services is also eroding. Prepaid mobile broadband services with usage caps of 3GB or more (sufficient for light users) now undercut entry-level fixed broadband service propositions in most Western European countries. Some broadband markets in Central and Eastern Europe, such as those of Poland and Estonia, are also approaching pricing parity for fixed and mobile broadband services.
- The median speed of a DSL service in Europe has reached 8Mbit/s for the first time, compared with 15Mbit/s for cable modem and 50Mbit/s for residential FTTB and apartment LAN services.
Click here for further information about our report Triple-play pricing study 2Q 2010: price competition returns, and here for more details about Analysys Mason's Fixed Broadband subscription research programme.