Point Topic: DSL Good for Casual Net Users, FTTx for Power Users

Increased competition has led to continued declines in broadband fees, according to new research from Point Topic. Worldwide, broadband households now pay on average just half what they were paying for their bandwidth in early 2008. (Point Topic gathers data on more than 3,000 broadband offerings around the world.)

“DSL prices in particular are being squeezed. Competition between operators and access technologies is driving the search for more markets, and DSL is well placed to capture customers who don’t need full-speed 24/7 bandwidth,” says Oliver Johnson, CEO of Point Topic.

Index of entry-level, stand-alone fixed broadband prices - cost per Mbps



Web Surfers Versus Power Users
Johnson adds, “Many users do not use their broadband for more than a couple of hours a day, and when they do, it’s often for applications that use relatively little bandwidth. They care much less about the cost per megabit, where fiber has the edge, than about the upfront and monthly charges - and DSL wins that battle hands down.”

Some of the more advanced markets present a different story. “Fiber to the building is a popular way of providing broadband. An increasingly common model in many markets is for a block of flats to get a fiber connection, and the bandwidth is then delivered over a LAN to the individual units,” Johnson says. Countries such as Japan, Korea and (in the near future) Australia, where there are highly concentrated populations and end-to-end fiber is available, are seeing significant technology substitution, with DSL in particular being replaced by fiber. The result is that the drop in DSL prices is not worldwide; in Asia-Pacific, costs have increased over the last two years.

“Subscriber behavior is changing. The increasing popularity of high-bandwidth applications, particularly video, means that low cost per megabit carries more weight than low subscription costs. Operators are seeking ways of fulfilling existing needs and scrambling to create new ones. The developing broadband markets will continue to see rapid growth, particularly in DSL subscriptions, in 2011. However, the advent and spread of connected TV is going to be the real news in the mature markets. Enabling consumers to watch streaming video on their TV sets will drive bandwidth demand up significantly, and where fiber is available, we’ll see appreciable growth in its market share,” says Johnson.