Written by Ken Young, whose own blog is called The UK Mobile Report.
The price of standalone broadband in the UK has dropped 36 per cent since 2004, while average speeds have increased 16 times in the same period, according to a survey of services by price comparison specialists uSwitch. The UK now has 15 million households spending an average of $33 per month — or $6 billion per year, in total — for an 8 Mbps connection.
This price drop reflects a highly competitive retail market, and it’s likely to spur providers to offer more features as a way to increase loyalty and gain extra revenue.
There is much speculation about how this will occur. One particularly good summary is given by the UK blog Telco 2.0 (a project of UK consultancy firm STL Partners), which talks of a move toward using location and presence to enable everyday business processes (e.g. parcel delivery, health care services), ad insertion, or e-commerce services like credit checks.
That might be the way forward for the telcos, but most subscribers remain obsessed with speed. Virgin Media is leading the market with plans for a 50Mb service by year-end. But as uSwitch notes, Virgin is also the only major provider offering packages at more than one speed.
From the consumer perspective, more also needs to be done to make switching between suppliers in the UK easier. Notably, unless you are using web-based email, the email address you have cannot be transferred to your new supplier. Meanwhile many users are locked into bundled deals that offer phone, broadband and TV.
Experts also say it is hard to compare UK services on an apples-to-apples basis, as actual broadband speeds offered vary depending on a number of technical factors. Users also have to look carefully in the small print of their contracts to find out what ‘fair use’ policies apply, as most providers have introduced caps to restrict heavy users.
What is unclear is whether consumers will be attracted by broadband with such value-added services, or if they’ll opt to stick with vanilla services, which are likely to be cheaper and easier to compare. Much depends on how innovative the telcos can be.
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