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DSL Prices Stabilize in 2003

After falling 22 percent during the past three years, monthly rental prices for entry-level DSL services began to stabilize in 2003, according to tariff research conducted by Point Topic Ltd. (see DSL Service Prices Settle Down).

The average price reduction during the fourth quarter was 2 percent, with only six of the 18 operators surveyed cutting their charges. And the high cost of providing DSL services means this trend is likely to continue in 2004, reckons Tim Johnson, founder and publisher of Point Topic.

"On the whole, operators will keep prices the same," predicts Johnson. "They can’t really afford to cut them any more," but they may need to increase their access speeds to remain competitive, he notes.

Prices may even go up. Deutsche Telekom AG (NYSE: DT), for example, was forced to increase its tariffs after the German regulator Regulierungsbehörde für Telekommunikation und Post (RegTP) upheld competitors’ complaints that it was engaging in below-cost pricing. This price hike can be seen in the chart below.

The chart shows an overall trend of rising prices in 2001, a leveling off in 2002, and then a sharp dip in mid-2003 before stabilizing once more.

Johnson believes market conditions will get tougher for operators as competition increases and uptake slows down. "DSL is a more mature market than many people realize," he says. "Even in the U.K. more than 20 percent of Internet users already have broadband."

This maturity will lead to a broader range of services, with operators offering low-cost, low-speed access to tempt customers that want to upgrade from dialup but who can't afford, or don't need, regular broadband. Spain's Telefònica SA offers such a service, but it is not classified as broadband by Point Topic.

The DSL tariff report follows Point Topic's cable broadband benchmarking results, which showed that cable prices have also remained stable (see Cable Broadband Prices Steady).

— Nicole Willing, Reporter, Light Reading

rtfm 12/5/2012 | 2:29:31 AM
re: DSL Prices Stabilize in 2003 It's rather hard to compare things when Japan has 12 Mbps (or so) DSL for <$25/month, and NYC has 640 kbps for $40 (but, I'm told India has $70+ for 128 kbps - if you want unlimited usage)

rtfm
TelCoEngineer 12/5/2012 | 2:29:28 AM
re: DSL Prices Stabilize in 2003 when Japan has 12 Mbps (or so) DSL for <$25/month

************

They have density going for them. It is cheaper to deploy when everybody is packed in like sardines.

It may be $25 / mo directly, but it is subsidized more than the small American farm.....They pay for it through taxes. And, it is not available throughout the entire contry. Ain't it nice for the folks in Okinawa to help the folks in Tokyo to get cheap DSL?

By the way, my friends that get the $25/mo 12 Mb in Tokyo don't do anything more with it than I do with my 3Mb cable modem. They also have the same upstream problems we do.
rtfm 12/5/2012 | 2:29:20 AM
re: DSL Prices Stabilize in 2003 I know that urban areas are much easier to deploy services in, but they also have *much* deeper fiber than here in the US. That was a strategic/design decision. The stories of subsidized are not necessarily true (and we have our own share of subsidies, or at least unequal playing field, here). Academics from S. Korea I've talked to insist there is tremendous pressure to be profitable, and so-called subsidies are often just the first few years of deployment which are *projected* as loss-making.

Your comment what people do with the bandwidth is something I think users need to worry about - Korea sees lots of online gaming, and we're about to see video on DSL in a much bigger way. But, your statement on uplinking is intriguing. Isn't much of Japanese usage in Japanese language, reducing international connectivity requirements?

My post was just meant to state that DSL prices may have declined, but they can and should go lower over time (in the US), esp. on a per bit basis.

rtfm
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