London -- Point Topic's new research paper, 'Business DSL service features', shows that prices for symmetrical DSL (SDSL) services have fallen sharply in the last year, particularly in Europe.

The data shows significant price cuts, plenty of new product and some large comparitive price differentials emerging.

The changes in Europe, particularly the German-speaking countries, have been particularly dramatic. Many prices have been cut, with reductions of up to 70% in the first -year cost for both 'entry-level' and 'high-speed' services. Probably for the first time ever, some business broadband services in Europe are cheaper than they are in America. Our analysis suggests that European incumbents are becoming less paranoid about cannibalising leased line revenues, and are finally beginning to compete with CLECs wanting to increase their market share of business users.

The market in North America also remains competitive, although price falls in general have not been as dramatic and widespread as amongst European operators. The entry level services (up to 1160 Kbps) are where the North American operators have made the biggest cuts, with the pricing for high speed services (1500 to 2300 Kbps) remaining mostly static. The small number of Asia-Pacific operators covered have mostly kept prices steady in local currencies, which can translate as a rise in dollar terms.

There are large price variations within markets, with amortised monthly costs varying by up to a factor of 10 between some operators. Given the number of different services, contention ratios and speeds on offer direct comparisons are not easy for the customer to make. However it is likely prices will start to harmonise as better information reaches the end user.

In 2003, European service providers were generally charging much more for symmetrical business DSL services than their American counterparts. Now Europe is closing the gap for lower-speed entry-level services, and leading operators are cheaper than most American ones for high-speed services.

Our 2003 analysis showed that QSC and Deutsche Telekom were then the only European operators offering entry-level symmetrical services below $300 per month. There are now four incumbents (KPN, Deutsche Telekom, Swisscom and Telekom Austria) and three other European operators (NextGenTel, BlueCom and Net Cologne) offering services under the $300 per month level.

There is a bigger divergence between North American and European operators in their policies for ‘high-speed’ services (typically 1500, 2000 or 2300 Kbps). In the 2003 survey it was the American operators that were the cheaper charging between $300 and $500 per month for 1500 Kbps services.

The prices for these American operators have remained largely in the same category, however there are now 4 European operators (QSC, Deutsche Telekom, Cistron and Demon Internet) that are offering symmetrical services at less than $300.

Symmetrical DSL for business is still a young market. Take-up is only a few percent of that achieved by Asymmetric DSL (ADSL), which was designed primarily for consumer use. But with big price cuts, increasing competition and many applications (Voice over IP, virtual private networks and telworking, for example) business DSL is due to grow rapidly.

Point Topic Ltd.