Despite, or perhaps because, of the world’s financial dire straits, the ITU reported an amazing 42 per cent drop in fixed broadband prices worldwide from 2008 to 2009.
What’s strange is that the very operators who seem able to compete gaily on price – and getting on to halving prices in a single year is an amazing achievement – are almost certainly the ones moaning about bandwidth-gobbling services like the BBC’s iPlayer or Google’s Youtube.
Here’s a thought, if your costs really are going through the roof, why not decrease your pricing by just 30 per cent instead of 42 per cent? That would have given you getting on to a 20 per cent revenue boost over your current take and would probably represent more than enough to compensate for the extra core network bandwidth costs caused by the supposed video flood that’s, in turn, supposed to be causing your ruination.
In other words, don’t put up prices – the thing you say that users wouldn’t stand for – just lower them less drastically. Simples.
Of course the happy tale isn’t uniform (you knew it wouldn’t be).
Northern Europe tops the ITU’s general ICT index, but in the developing world, those who can afford the least are inevitably paying the most, especially in terms of proportion of disposable income.
But even in real terms there is a huge discrepancy. The report says that a “fixed broadband subscription costs under US$ 10 a month in Macao (China) and Israel. But in over 20 economies worldwide – most of them UN-designated Least Developed Countries – it costs over US$ 100 a month.”
That translates to a cost to subscribers in the richest countries of about 1 per cent of average income (1 per cent! That’s got to be the best value offering in the history of mankind) to over 100 per cent of average income in the poorest!
Why those in poor countries are having to pay $100 per month is not properly explained, but the possibility that greedy, monopolistic and inefficient telcos (of the sort reformed by most of Northern Europe in the 1990s) are still at large must be counted as a major possibility.
The ITU says other ICT services are getting cheaper, too, with the relative price for mobile cellular dropping 25 per cent from 2008 to 2009, and for fixed telephone services by 20 per cent.
