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World differences in broadband prices

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Internet has become a necessity, comparable to transport or even food and as happens with these necessities. Prices vary depending on many factors. Although this new means of networking is significantly new, if compared to transport and food, its rate of growth is extremely fast.

When the internet was liberated to the public in the last decades of the 20th century, connections were completely different from what is on offer nowadays. Internet began with ‘dial-up’, evolved to broadband and WIFI serviced by means of copper and now is transforming to fiber.

DID YOU KNOW? World average price for broadband is around $60 a month and the most expensive connection has its home in Cuba. There the monthly fixed cost for a broadband connection rises to an incredible $1,700, in contrast, Sri Lanka has the lowest at $5,5.

Development of Information & Communication Technology (ICT)

At the beginning of the 21st century users would mainly subscribe for fixed wired-broadband, at present this has plummeted and what is growing is the active mobile-broadband. As you can see in the following graph.

global-ict-developments


Key to acronyms
●    FWB - Fixed wired-broadband subscription
●    FT - Fixed- telephone subscription
●    PII - Percentage of individuals using Internet
●    MCT - Mobile-cellular telephone
●    HIA - Households with Internet access
●    AMB - Active mobile-broadband subscription


These developments that continue the trend towards AMB subscriptions is growing fast due to the affordable prices offered. Although it’s not comparable to FWB subscriptions, it has become a highly solicited product when it comes to low-volume users and for people who don’t qualify for postpaid subscriptions.

Although by the end of 2011 more than 160 economies worldwide had launched 3G services commercially, reflecting the surge in handheld devices that are capable of accessing the internet (tablets and smartphones). There was still 55% of the world’s population not covered by 3G and adding to this, the percentage of users who have none or limited access to FWB subscriptions. It gives a global perspective on the usage and access provided by companies.

World differences in broadband prices


Copper and Fiber cables

Broadband in its majority is serviced through copper cable due to the fact that telephone lines used this material. The infrastructure was there and it gave decent results. But Peter Löthberg, a internet legend, opened Pandora’s box (in the eyes of governments) when he installed at his mother’s house, with the aid of the local council, a fiber cabled internet that reached the amazing velocity of 40 Gb/s.

40 Gigabytes - allows the user to, for example, to download a HD DVD in 2 seconds or be able to watch around 1,500 HDTV channels simultaneously!

When these unbelieveable results were exposed to societies (2007 approx.), internet companies and governments had no choice but to start building this new method of providing internet. The potential of fiber cable is huge, as is, the cost of its installation. This is one of the main reason’s for different prices when applying for an internet subscription - in developed countries. This new system is still at a very tender age and it practically only exists in cities, the rest of the regions function with copper.

ICT Price Basket methodology (IPB)

Comparing broadband prices for countries across the world does not tell us everything, since it does not consider the income of those who are going to buy the service. To clarify this issue, the ITU also lists broadband prices in relation to Gross National Income per capita (GNI p.c.)

The methodology used by the Broadband Commission to apply prices: the IPB is the value calculated from the sum of the price of each sub-basket: fixed-telephone, mobile cellular and fixed broadband services (in USD) as a percentage of a country’s monthly GNI per capita divided by three. The following charts show the top 10 and bottom 10 countries in relation to their GNI.

top10countries

bottom10countries

As you can see, as in other businesses worldwide, equality doesn’t exist, but the Broadband Commission’s goal is, that all countries should have by 2015. A price at a cost of no more than 5% of their GNI per capita. At present there are 84 countries out of 161, that are capable to manage this goal.

There is a long way to go in this relatively new technology and what most statistics reveal is the common sense fact, that competitivity has to be the trigger to achieve such a goal. Unfortunately this isn’t the case at the moment because there are many parts of the world where monopolisation of the business, is common use and not only in developing countries (UK, Spain or China).
 
Therefore in the end one has to study very carefully what you’re subscribing to, taking into account the usage of the internet one will have and where in the world one is. Fair deals can be seen if the monthly cost of the service is between $30 to $60. If you live in Australia, you can compare broadband prices for your city in our website.


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