Broadband prices sneak up in Q4 2007

The average entry level prices* for DSL, cable and FTTx subscriptions have increased slightly during the last quarter of 2007 according to the latest data from Point Topic. The company takes a representative group of operators in each region and tracks their tariffs to establish a benchmark for the various broadband technology prices.*

Most significantly, the average price for cable services increased from €17.9/US$27.21 to €18.04/US$27.43 due to the activity by the Australian operator OptusNet Cable.

"OptusNet Cable recently rebranded some of its broadband offerings. As a consequence, the price of one of the operator's services called "˜Yes' My Home Starter increased by 16.8% from €16.07/US$21.55 to €16.69/US$25.17," said Fiona Vanier, Research Analyst at Point Topic. This makes OptusNet Cable the sixth the most expensive cable operator in the world.

The increase in the DSL entry level prices (from €16.07/US$24.43 to €16.80/US$24.54 on average) was mainly influenced by Telekom Austria's pricing policy. The company raised the price of one of its services, AonSpeed Start, by 30% to €19.84/US$30.16 and increased the downstream speed of this service from 500 kbps to 1Mbps.

By the end of last year the Austrian operator offered the fourth most expensive entry level prices for DSL access after Western European incumbents Telefónica, Deutsche Telekom and Belgacom, and just ahead of the UK's BT.

The average entry level prices for the FFTx services also increased due to the changes made by only one operator, Swedish-based Svenska Bostader. It made a slight adjustment to its entry level service in the end of 2007, raising the global average price from €19.137/US$29.09 to €19.143/US$29.10. Even so, Svenska is the world's fourth most expensive FTTx operator, a considerable distance behind the most costly, Verizon, which charges €26.31/US$39.99.

"We think that the increases in average prices are significant, but we're not yet ready to call it a trend," said Vanier, "however without external factors coming in to play it's difficult to see room for further price cuts in the next two to three quarters," she concluded.

*All prices quoted are at PPP (purchasing power parity) rates to allow direct comparison.

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