Global Broadband Tariff Benchmark Report, Q4 2022
Full fibre broadband tariffs are steadily on the rise as copper legacy offerings decline with both residential and business tariffs monthly charges fluctuating across the globe as challenging market conditions affect consumers
Summary of key findings:
In the twelve months to the end of December 2022, the average global downstream bandwidth provided to residential subscribers has gone up by 17.3% to reach an average speed of 488 Mbps, with business bandwidth increasing by 27% and standing at 459 Mbps on average. As expected, the boost was caused by the increase in bandwidth provided over more advanced fibre and cable networks. Overall monthly costs for residential services decreased by 2.4% y-o-y, with business tariffs increasing by 9.3%.
Main global broadband tariff trends in Q4 2022:
Charges for residential fibre-based products decreased by 2.4% as downstream averages increased by 12% to reach 574 Mbps; cable-based products saw a 5% reduction in prices y-o-y with average bandwidth speeds increasing to 466 Mbps; copper-based tariff charges decreased in costs with charges coming down by 4.7% and average speeds remaining static at 11 Mbps y-o-y.
Gigabit-capable tariffs continue to rise with 791 residential gigabit tariffs (with downstream bandwidth of at least 900 Mbps) in Q4, compared to 456 in Q2 2022, 397 in Q4 2021, and 367 in Q2 2021.
Fibre-enabled business products monthly charges decreased to $231 PPP y-o-y whilst average speeds increased by 16% to reach 518 Mbps; cable service charges decreased by 5% but increased bandwidth has slowed to reach an average of 367 Mbps; copper prices have dropped but so have the average downlink speeds with an average cost per Mbps coming in at $14.55 PPP.
Asia-Pacific region retained its dominant bandwidth position with average speeds of 1,415 Mbps, up from 1,355 Mbps in Q4 2021, followed by North America, Western Europe, and Southeast Asia with the three regions reaching a combined average of around 527 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 17.3%, compared to Q4 2021. As expected, the boost was caused by the increase in bandwidth provided over more advanced fibre and cable networks. We have recorded 791 residential gigabit tariffs in Q4 2022 compared to 397 in Q4 2021.
In Q4 2022, the combined average cost per Mbps on broadband packages provided over fibre, cable, and copper technologies saw a decrease of 30% and stood at $0.16 PPP. The decrease in the average cost per Mbps of fibre dropped by nearly 13% y-o-y. However, with inflation and an overall increase in the cost of supplies and materials has meant that during the period Q2 2022 to Q4 2022 the average cost per Mbps of fibre products has remained static at $0.14 PPP.
For cable technology, the average cost per Mbps fell by 19% y-o-y (and nearly 6% from Q2 to Q4 2022). In terms of the cost per Mbps, copper remained by far the most expensive technology at $7.62 PPP, seeing a 1.2% increase since Q4 2021 and 0.9% since Q2 2022.
See Table 1 below for further information about the cost per Mbps by technology splits.
Business year-on-year trends by average cost and download speeds by technology
Keeping in line with global residential broadband trends the average bandwidth of fibre-based products has continued to increase with the overall average monthly cost of fibre connections decreasing year-on-year. Looking at the y-o-y performance the average cost has decreased by nearly 12% whilst speeds have increased by 16%.
In Q4 2022, the combined average download bandwidth grew by 27% compared to Q4 2021 and stood at 459 Mbps. This was caused by the slight boost in the average speed over cable and especially fibre, 2% and 16% respectively. Copper’s average download speed decreased by 18% compared to the previous year. However, the overall global average monthly cost across the three technologies has increased by just over 9% from $225 PPP to $246 PPP at the close of Q4 2022 (Figure 2).
In Q4 2022, the average combined cost per Mbps on business broadband packages dropped by 13% y-o-y and stood at $0.54 PPP. Year-on-year price decreases on business connections on cable and fibre technologies are starting to show significant improvements, despite the various global socioeconomic factors and global supply chain issues resulting in the operational costs being transferred to the consumer.
By far the biggest reduction in average pricing was for fibre-based connections which saw just over a 22% decrease y-o-y and went from $0.58 PPP to $0.45 PPP at the close of Q4 2022. The cost of cable went down by nearly 9% to $0.31 PPP from $0.34 PPP. The cost of copper connections continues to increase annually with the close of Q4 2022 seeing a 19% increase and stood at $14.55 PPP with only 187 tariffs out of the 1773 business tariffs we tracked still offering services on this platform.
See Table 2 below for further information about the cost per Mbps by technology splits.
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 1,415 Mbps, up from 1,356 Mbps in Q4 2021. Worth noting is that the average is slightly down from Q2 2022 when the reported average speed was 1,446 Mbps. This is due to fewer tariffs being offered in the region (c. 200 in Q4 compared to c.220 in Q2) along with nearly 20 of those tariffs not having a reported speed by the operators. However, given that the majority of the tariffs are based on FTTP technology one can presume that the actual regional speed averages for fibre are higher than Q2 2022.
As deployments of fibre and ultrafast cable broadband continued at pace throughout the year, North America, Southeast Asia, and Western Europe followed with the three regions reaching a combined average of around 527 Mbps (Table 3).
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 Q4 2022 we tracked 275 tariffs in the regions, with 132 of these packages using FTTP-based technology, compared with 116 out of 266 in Q4 2021, and 121 out of 277 at the close of Q2 2022. Prices in the regions have usually remained high due to the limited supply of fixed broadband. Although these regions do still remain the most expensive in overall average monthly costs, prices are beginning to decrease as fibre and wireless technologies become more widely available.
With still relatively low fixed broadband penetration, Latin America followed as the second most expensive market offering the second lowest average bandwidth at 345 Mbps, just behind Eastern Europe’s 330 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 and only very marginally in South East Asia.
Worth noting is that since Q2 2022 when the cost of living crisis along with strong economic headwinds were in full swing, the overall monthly regional charges have slightly increased. The only exceptions being in the Middle East and Africa and North America. Again, this trend is likely to continue into the Q2 2023 reporting cycle as further inflationary rises are expected.
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 4). 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 5), thus offering the best value for money to consumers. At the bottom of the ranking table were Libya at $9.50 PPP, Senegal at $4.34 PPP, Bolivia at $2.45 PPP and Pakistan at $2.37 PPP.
Regional business tariffs and bandwidths
In Q4 2022, the lowest-priced average monthly tariffs were offered to businesses in Eastern Europe and Western Europe. The Asia-Pacific region had the highest average download speed at 601 Mbps with Western Europe following with 592 Mbps, with the latter offering the best value for money on business broadband (Figure 3).
As expected, compared to Q4 2021 the average bandwidth increased in all regions while the average monthly charge for business broadband fluctuated, especially when comparing the biannual changes from Q4 2021 to Q4 2022 (Table 6).
Eastern Europe remains the only region where average speeds have continued to increase whilst costs have decreased. The region is showing steady improvement in terms of speed and although not overly impressive at an average of 271 Mbps it is not at the bottom of the rankings where the Middle East and Africa come in at 199 Mbps. Similar to the residential market, the Middle East and Africa are vast and vary in their technological offerings with Eastern European countries being more dense and urbanised with a focus on rolling out full-fibre services at scale.