For DSL Cheaper and Slower Means Market Share

A lot of us are amazed by the supersonic growth of DSL services around the planet. While in some countries such as Japan, China, UK and South Korea it has been the increasing speeds that are attracting consumers to the DSL as a broadband option, in the US it is the entry level $15-a-month plans from folks such as SBC that are super charging the market place. Apparently, this slower-and-cheaper formula is being used across the world. Point Topic says that the DSL prices for entry level services have fallen 7.1% overall in 2005 across 18 operators in 15 countries tracked by the research firm.

Telecom Italia for example has cut its download speeds by half on its entry level package, to 640 KBPS which is in the range of entry level speeds being offered by other European operators. While most of us high-end users (in the US) want more bandwidth, the market reality is that the back-end of broadband demand is coming from reluctant switchers who are only interested in low-price. I bet the cable guys are going to pick-up on this and start aggressively marketing their “K-Mart” plans as well. The markets are getting mature, and operators will soon have to figure how to distinguish themselves from others simply on speed to attract the mainstream users. Price is one. Bundled services is another factor. What else? Any thoughts folks? (No please don’t say P2P networks – we know that ;-) )