For the past few years, broadband access in the U.S. has been a horror show. Average broadband speeds have remained largely the same as cable companies, which have regional monopolies in many parts of the country, have raised prices and in some cases started capping plans with tiers of data.
Today some hope has come for those stuck with poor broadband access as market research firm Strategy Analytics released a report showing that broadband speeds are slowly increasing in the U.S. The firm stated that this rise in speed is not coming along with a rise in prices, meaning that customers with existing broadband access could soon see improvements to their plans, while their price-tier costs will remain relatively stable.
“There is a limit to how much ISPs can compete on price, and the relatively slow shifts in average pricing suggest we are close to that limit,” said Halvor Sannaes, director of Teligen at Strategy Analytics. “What providers seem to be looking more to now is how they can add value to maintain competitive advantage. Certainly we are seeing more providers increasing speeds within given packages, but not changing the price. This is a reflection of network upgrades, of course, but it is something that the end user is clearly benefitting from for no additional outlay”
Though incremental “network upgrades” have certainly played a role in the rising speed of broadband access, competition could be spurring cable companies to action as well. In places where Google Fiber has appeared, or even just been announced, incumbent broadband providers have been forced to cut prices and invest in modern network infrastructures. In the meantime, Strategy Analytics is advising that current broadband providers can still squeeze a few more dollars out of their customers through services such as mobile access and pay-per-minute access to the internet.
“There is definitely room for more innovation in broadband pricing, and not just through bundling of fixed offers, but also through extending the offer to include add-ons such as mobile broadband, as well as using approaches such as time-based charging and Wi-Fi access when away from home, and this is something we anticipate seeing more of in the future,” said Josie Sephton, senior tariff consultant for Strategy Analytics.