Speed Is Price Sensitive

Speed Is Price Sensitive

According to Mark Kersey, a broadband and cable industry analyst reporting in a recent ARS study, "The economic downturn has led to consolidation in the broadband industry, resulting in fewer choices and higher prices. This trend will hamper the widespread adoption of broadband services and that the vast majority of (Internet) users will continue to access the Internet via dial-up connections for the foreseeable future."

The study shows that:
- cable broadband Internet prices rose 12% in 2001, from an average of $39.40 per month in January to $44.22 per month in December.
- digital subscriber line (DSL) prices rose 10% during the same time frame from $47.18 in January to $51.67 in December.

A slowing economy caused service providers to shift their focus toward making money instead of gaining market share. The study included the following conclusions:
- 76% of the Broadband service providers offering services throughout the year raised their rates. Including January, 2002, it is 83%.
- 65% of all Broadband providers had higher rates in December, 2001 than in January, 2001. With raised rates as of the first of the new year, that number goes to 70%.
- 46% of DSL providers with service in January, 2001 are bankrupt, acquired or otherwise out of business in December.

Broadband Subscriber Growth (from previous quarter)
Q301 - 14.2%
Q201 - 14.9%
Q101 - 25.8%
Q400 - 34.1%
Q300 - 34.2%
Q200 - 34.3%
Q100 - 39.5%
Source: ARS, Inc.

Read the PDF report.

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