The cost of broadband Internet technology around the world has fallen sharply over the past 12 months, which has generated a rapid increase in the number of subscribers, says a new market report by Point Topic (London—www.point-topic.com). The report also predicts further price reductions after the average monthly line-rental cost fell by 25% around the globe. The United States experienced the sharpest falls, with reductions in excess of 40%.
"This is a new trend," says Point Topic's Tim Johnson. "Most operators held prices steady or even raised them during 2001 and 2002." The U.S. came late to the game, with the two biggest U.S. telcos, Verizon and SBC, making particularly big cuts. "If the price cuts are successful, there will be rapid growth in DSL numbers in the U.S. in the current half-year," surmises Johnson. Of the 14 major telcos analysed, only one, Deutsche Telekom, increased DSL rentals in the past 12 months.
Comparing tariff levels between operators in different countries, rather than operators' own changes over time, shows that the Asia-Pacific region is still by far the cheapest place to get broadband services. North American prices are converging at a level not much higher than the more expensive Asia-Pacific countries, but Europe is distinctly the most expensive region. "This is mostly due to the rising euro and the high level of value-added tax," notes Johnson. "But the fall in the pound against the euro has made BT one of the cheaper European DSL suppliers."