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 Wednesday, May 21, 2008

Global speeds and prices of residential and business DSL services increased by 4.7% and 9.3% respectively in the first quarter of 2008 according to analysis from Point Topic’s quarterly tracking report.*

The global average residential DSL service cost and downstream speed in Q1 2008 increased to $61.36 per month (up 9.3% on Q407) and 6,517 Kbps (up 4.7%) respectively. Business DSL prices now average $227 per month with a downstream speed of 4,126 Kbps an increase of 23% in price while downstream speed increased only by 3%.

The most significant speed changes were reported in Latin America, as average downstream residential and business speeds increased by 36% to 2,737 Kbps and 40% to 2,995 Kbps respectively.

“It was due in part to Telecom Argentina and Telefonica del Peru,” says Fiona Vanier, Senior Analyst at Point Topic.

“Telecom Argentina introduced two new high speed business tariffs with downstream speeds of 20 Mbps while Telefonica del Peru expanded its range to include two new tariffs with downstream speeds of 5 Mbps.”

Although there was an increase in the monthly global average price of DSL services, their cost expressed in the PPP rate actually decreased by around 5%. The difference is primarily due to exchange rate fluctuations. While the US$ rate is updated regularly the PPP rate usually only changes once a year, which means it needs to absorb some turbulent times in the global market.

FTTx and cable tariffs have remained relatively unchanged even after the PPP adjustment. As a result, the gap between the DSL tariffs and the cable and FTTx tariffs (this service is still the most expensive) has widened.

Figure: Average entry level broadband service tariff (PPP rates

“Telefonica in Spain implementing the largest price change cut its entry level ‘ADSL Mini 1 Mbps’ service by 36% to $24.80. Belgacom introduced a new entry level service called ‘ADSL budget’, which at $22.47 replaced their previous entry level service, ‘ADSL light’,” said Fiona Vanier.

Source:Point Topic