Study says 1% price cut would bring broadband to 5m homes

Friday, October 28th 2011
Five million more households would be able to afford broadband if the price was cut by just one per cent.
Study says 1% price cut would bring broadband to 5m homes
Just a fractional reduction in the price of broadband would make the technology available to millions more consumers worldwide, according to Point Topic.

The telecoms analyst claimed around five million more homes would be able to afford a broadband connection if the cost was to fall by only one per cent.

Now that an increasing number of super-fast broadband solutions can be utilised, it is essential that network operators are able to deliver their services in a cost-effective manner, the organisation stated.

Oliver Johnson, chief executive of Point Topic, said the rollout of next-generation broadband services is "gathering steam", with more than half a billion fixed lines already in use across the world.

However, he cautioned that this could create a "deepening digital divide" between nations and regions with fixed broadband access and those unable to take advantage of the service.

The analyst insisted it is "way too early" to claim the issue of broadband availability has been solved completely, as many countries still have lower levels of penetration "than you'd want to see".

According to Mr Johnson, this problem is caused by the fact households cannot afford to pay for a broadband package, rather than lack of coverage.

"Even in mature and relatively rich broadband markets there are significant shortfalls in take-up due to the cost of a subscription and the kit that goes with it," he explained.

The analyst said standards, information, competition and technological innovations will all play a part in bringing down prices, but added: "Mostly, however, it's about how much of any saving a supplier can pass on to its customers."

Point Topic's report was published shortly after the UN's International Telecommunications Union set a total global internet user penetration target of 60 per cent by 2015, including 50 per cent in developing nations. It described this goal as "ambitious but achievable".

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