Proliferation of global fibre networks sees residential consumers reaping speed and cost rewards, while B2B subscribers see little improvement in bandwidth versus monthly charges.
Summary of key findings
In the twelve months to the close of Q2 2022, global residential fixed line broadband subscribers saw their average monthly charges decrease by 4% on copper, cable and fibre based tariffs. Across the three technologies the average bandwidth increased by 22% year-on-year (y-o-y), due to the increased innovation and proliferation of fibre based networks globally. Business subscribers continued to struggle with rising monthly charges, with the average monthly charge increasing by 12% and the average downstream speed standing at 426 Mbps compared to residential tariff averages of 464 Mbps.
Main trends in Q2 2022:
Charges for residential fibre based products decreased by 5% as downstream averages increased by 17% to reach 549 Mbps; cable based products saw a 4% reduction in prices y-o-y with average bandwidth speeds increasing to 433 Mbps; copper based tariff charges remained static but saw a decrease in average speeds from 13 to 11 Mbps y-o-y.
Gigabit-capable tariffs continue to rise with 456 residential gigabit tariffs (with downstream bandwidth of at least 900 Mbps) available in Q2, compared to 397 in Q4 2021 and 367 in Q2 2021.
Fibre enabled business products monthly charges remained static at $241 PPP y-o-y whilst average speeds increased by 17% to reach 515 Mbps; cable service charges decreased by 14% but increased bandwidth has slowed to reach an average of 377 Mbps; copper prices have dropped but so have the average downlink speeds with an average cost per Mbps coming in at $13.00 PPP.
Asia-Pacific region retained its dominant bandwidth position with average speeds of 1,146 Mbps, up from 1,355 Mbps in Q4 2021 and 1,135 Mbps y-o-y, followed by North America, Western Europe, and Southeast Asia with the three regions reaching a combined average of around 465 Mbps.
Qatar, Switzerland and Southeast Asian countries still remain at the top of the league by average bandwidth along Italy, France and Bulgaria; these countries all rank in the top ten cheapest for residential broadband in terms of average cost per Mbps being less than $0.10 PPP.
Residential year-on-year trends by average cost and download speeds by technology
The average global downstream bandwidth provided to residential subscribers has gone up by 22% in Q2 2022, compared to Q2 2021. As expected, the boost was caused by the increase in bandwidth provided over more advanced fibre and cable networks. We have recorded 456 residential gigabit tariffs (with downstream bandwidth of at least 900 Mbps) in Q2, compared to 397 in Q4 2021 and 367 in Q2 2021.
In Q2 2022, the combined average cost per Mbps on broadband packages provided over the three technologies saw a significant price decrease of nearly 23% and stood at $0.17 (PPP). The drop was caused by decrease in the average cost per Mbps of fibre which decreased by 22%, cable technology fell by 14% compared with Q2 2021. In terms of the cost per Mbps, copper remained by far the most expensive technology at $7.55 PPP, seeing a considerable increase of 17% since Q2 2021 (Figure 2).
Business year-on-year trends by average cost and download speeds by technology
Despite a significant jump in the average bandwidth of fibre based broadband products the overall average monthly cost of fibre connections has remained static y-o-y. This is the first biannual reporting of tariffs since 2019 where the average monthly prices have remained at parity. Again, the wider availability of fibre based products offering even greater bandwidths has equalized the pricing in the business broadband sector. This will continue in the coming months as operators become more competitive in terms of product pricing to remain attractive to B2C and B2B subscribers. However, the B2B sector remains challenging for some European operators where we have seen some subscriber losses due to the effects of the Covid-19 pandemic, war in the Ukraine, and overall inflationary price increases having a strain on retention levels.
In Q2 2022, the combined average download bandwidth grew by 20% compared to Q2 2021 and stood at 426 Mbps. This was caused by the boost in the average speed over cable and especially fibre, 14% and 22% respectively. Copper maintained largely the same average download speed compared to the previous quarter. However, the overall global average monthly cost across the three technologies has increased by just over 12% from $217 PPP to $244 PPP at the close of Q2 2022 (Figure 3).
In Q2 2022, the average combined cost per Mbps on business broadband packages dropped slightly by just under 7% and stood at $0.57 PPP (Figure 4). Year-on-year price decreases on business connections on the different types of technology have been slight when compared to previous years. This has been due to various global socioeconomic factors and global supply chain issues resulting in the operational costs being transferred to the consumer.
Regional residential tariffs and bandwidths
For many quarters now, Asia-Pacific has retained its dominant position in terms of average bandwidth as operators in the region continued to innovate and push fibre services. In Q2 2022, the average bandwidth in this region was 1,446 Mbps, up from 1,355 Mbps in Q4 2021 and 1,135 Mbps in Q2 2021. As deployments of fibre and ultrafast cable broadband continued at pace throughout the year, North America, Western Europe, and Southeast Asia followed with the three regions reaching a combined average of around 465 Mbps (Table 1).
In the Middle East and Africa, a full range of technologies are still being offered - predominately DSL, VDSL and more recently mobile and wireless - there has been some progress in the proliferation of FTTP tariffs over the past several quarters. In Q2 2022 we tracked 277 tariffs in the regions, with 121 of these packages using FTTP based technology, compared with 116 out of 266 in Q4 2021, and 114 out of 276 at the close of Q2 2021.
With still relatively low fixed broadband penetration, Latin America followed as the second most expensive market offering the second lowest average bandwidth at 295 Mbps, just behind Eastern Europe’s 297 Mbps. However, Eastern Europe’s average monthly cost is nearly half as expensive as services in Latin America. Compared to 12 months ago, the average monthly charge for residential broadband has gone down in all regions except for North America. This has been a continual trend in North America especially given that broadband providers in the United States tend to bear up to 53% more in labour, network deployment, taxes and spectrum licensing costs than their European counterparts.[1]
At a country level, Qatar, Switzerland and the Southeast Asian countries still remain at the top of the league by average bandwidth, with Western and Eastern European countries also being in the top ten (Table 2). Nearly all of the same countries, albeit in a slightly different order, are also the ten cheapest for residential broadband in terms of average cost per Mbps being less than $0.10 PPP (Table 3), thus offering the best value for money to consumers. At the bottom of the ranking table were Senegal at $3.26 PPP, South Africa at $2.84 PPP and Bolivia at $2.47 PPP.
Regional business tariffs and bandwidths
In Q2 2022, the lowest priced average monthly tariffs were offered to businesses in Eastern Europe and North America. Also, Western Europe remained dominant over Asia-Pacific by the highest average download speed at 502 Mbps, offering the best value for money on business broadband (Figure 5).
Compared to Q2 2021, the average bandwidth increased in all regions, except for South and East Asia, while the average monthly charge for business broadband fluctuated, especially when comparing the biannual changes from Q4 2021 to Q2 2022 (Table 4).
South and East Asia’s average business bandwidth has seen a slight overall decrease from Q4 2021 (238 Mbps) to 229 Mbps in Q2 2022, however this is due to the total number of tariffs being compared during the periods. In Q4 there were 167 business tariffs being offered by 22 regional operators and for the period of Q2 2022 there were 11 operators offering 76 business tariffs. The majority of services being offered were FTTP based, however only 7 of the packages had speeds greater than 500 Mbps.
[1] Information Technology & Innovation Foundation, Apples vs. Oranges: Why Providing Broadband in the United States Costs More Than in Europe, 11 July 2022.
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