Broadband prices crash around the globe

Broadband Internet access prices are plummeting as cable and DSL operators compete for subscribers and users get fed up with dial-up, according to a report published by broadband research group Point Topic.

Broadband cable companies and DSL operators cut their monthly subscription rates by an average of 16 percent and 13 percent respectively during the first half of 2004, according to Point Topic's Broadband Tariff Benchmarks.

DSL access has historically been cheaper than a comparable cable modem service, but operators are addressing the issue and now the costs are at virtual parity.

According to the research, the average monthly rental for broadband cable services fell from $39 to $32, while DSL charges fell from $32 to $29.5.

Haroon Butt, senior analyst at Point Topic, said the price cuts indicate that cable operators are playing catch-up with their DSL rivals both in terms of price and subscriber numbers; and Butt expects the trend to continue.

"With cable operators showing every sign of waking up to the challenge from DSL, consumers can look forward to a period of increased competition and we fully expect aggressive pricing strategies to continue to be a feature," said Butt.

However, the exception to the rule was Yahoo Japan, which increased the price of its consumer broadband service in Japan by 20 percent. However, despite the price rise, Yahoo Japan remains the cheapest DSL provider in the world.

Butt said the price rise could have been because Yahoo Japan simply wants to price its service offerings closer to the international average, but he warns that if everyone charged as little as Yahoo Japan, there would be a significant shake up in the global market.

"If their prices were matched around the world, there would be a lot more broadband subscribers and a lot fewer broadband suppliers," said Butt.