Broadband services offerings have moved into a period of consolidation, with gradual rather than dramatic changes to both pricing and service features.

Based on an analysis current and past updates of Teligen's Fixed Broadband Price Benchmarking Service, we have observed relatively small shifts in the areas of price, download speeds and service bundling, with the majority of activity happening at the higher service end, e.g. higher speeds of standard and bundled services.

Pricing for lower speed services have remained relatively static, while higher speed (30 Mb/s and above) standalone and bundled services have fallen by 3.5% on average over the last quarter. This less dynamic shift compared to services such as mobile, for example, is in line with what we would expect - subscribers to fixed broadband services, especially when they include add-on services such as phone and television, are unlikely to change provider on a frequent or regular basis, due to the nature of the service. Providers recognise this, and have reflected this in their approach to pricing.

Rollout of higher-speed services, too, is a gradual process - average advertised download speeds have increased by less the 1.5 Mb/s since March 2012, and one which is more evident when looking at changes over the course of a year, or even longer.

Going forwards, we expect to see a continuation of current trends, with gradual, rather than dramatic shifts in both pricing and service features.

A more detailed analysis of these developments is available for free download.

The issue of Net Neutrality is one that has been widely debated, but to date, implementation is limited. Chile became the first country in the world to implement Net Neutrality, back in July 2010. The US also has strong Net Neutrality FCC Regulations in place for fixed networks, and something Strategy Analytics has reported on in other posts.

Following the introduction of legislation in June 2011 on Net Neutrality, the Netherlands has, as of last week, become the first European country to adopt net neutrality provisions into national law. What this means for carriers is that they can no longer charge extra, or impose special conditions for any internet service. Furthermore, they cannot determine what sites their customers visit. From a user perspective, this means that they have unrestricted access to the OTT services that are eating the operators’ lunch – services such as Skype, WhatsApp and Viber, for example – without the worry of having to pay extra to do so, or have connection speeds throttled. Only under exceptional conditions – network congestion and security, for example – are operators allowed to slow down user connections. The law also includes provisions for anti-wiretapping, prohibiting the use of deep packet inspection (DPI) on users’ tariff, unless the user says it is ok to do so. 

While this may appeal to some users, others may like the ability for data traffic to be treated differently by application to perhaps give them better options for a la carte pricing and improved user experience. It is unclear if operators are allowed to differentiate traffic if it is a user-selected subscription where the user has opted in for DPI.

The counter-argument surfacing is that this move to net neutrality could, in fact, lead to reduced innovation around new services for users, and furthermore, that an end-users’ broadband experience would be more susceptible to network congestion, simply because operators aren’t allowed to discriminate against bandwidth-hungry users. Another unwelcome outcome could be an increase in service prices by providers, to compensate for the restrictions

This is a contentious debate that is likely to run for some time to come, and has the potential to encourage more countries to consider whether to limit their providers in this way. Very interesting times ahead, and something that Strategy Analytics’ will be keeping a close eye on.

The Telecommunications Regulatory Authority (TRA) in Bahrain has just released the 2011 update of the retail price benchmarking study into telecoms services in Arab countries. The study was commissioned by TRA on behalf of AREGNET (the Arab Regulators Network), and was conducted by the Teligen division of Strategy Analytics.

The report provides a comprehensive analysis of the cost of telecoms services for different types of user, and considers the cost of fixed and mobile voice, fixed and mobile broadband and leased lines across several Arab countries, as well as providing a comparison with average OECD (Organisation of Economic Co-operation and Development) pricing. The development of prices since 2008 is also included.

The study found that Bahrain is one of the cheapest Arab countries across most services, and that in general, prices for telecoms services in Bahrain have fallen over the past four years. It concludes that in the past year, prices for telecommunications services in Arab countries have generally declined, although as prices have also been falling in other parts of the world, there remains an often substantial difference between prices in Arab countries and those in OECD / European countries, and that some areas in particular required closer attention

The full study results, along with detailed information on the methodology used, are available for download free of charge on TRA's website.

The broadband pricing lot of the rural customer in the UK is not always a happy one, with many often paying significantly more for broadband service than users in towns and cities (BT customers excepted). Pricing isn't the only issue; with general quality and speed of service often cited as comparatively poor. Moreover, Ofcom, the UK communications regulatory body, does not have any power to force these two-tier pricing ISPs to reduce their prices.

Ofcom's recent announcement, however, which states that BT must reduce wholesale prices by 12% below inflation per annum, from mid-August onwards, in areas where it is the only wholesale provider of broadband, will no doubt be welcome news to rural dwellers. The reduction should lead to greater competition among retail ISPs, which in turn will mean lower retail prices for consumers. Ofcom believes that the benefit of the caps will not just be restricted to retail pricing; improvements in service quality may also follow, as ISPs will be able to allocate more bandwidth per customer, and as a result, deliver faster broadband services.

How quickly consumers in rural areas will see the effects of the caps remains to be seen - Ofcom is anticipating that ISPs will start reducing retail prices by the end of the year. It certainly seems to be a step in the right direction

If you're interested in developments in broadband pricing, this is something that Teligen tracks closely though its broadband benchmarking service, T-Connect.