Study highlights potential impact of 1% cut in broadband prices

Standards and affordability are proving two of the most decisive factors in efforts to drive up broadband adoption and close the digital divide, according to a new report from UK research firm Point Topic.

“The next wave of broadband, commonly titled ‘superfast’, is gathering steam,” said Oliver Johnson, CEO of Point Topic. “With more than half a billion fixed lines already in use and many markets extending the reach of fixed broadband across their populations, the spectre of a deepening digital divide rears its head. On a global basis, if suppliers can shave one per cent off the cost of a broadband service then that brings it into the economic reach of at least another five million households.”

However, even in the countries which have already deployed GPON technology, there are still many areas which cannot support a commercial rollout of fibre for economic or practical reasons. Economies of scale enabled by the adoption of industry standards will prove “significant” in providing the necessary infrastructure elements for GPON deployment, according to the research firm.

Johnson added: “It’s way too early to say we’ve solved the availability issue for broadband. There are still plenty of countries with lower penetration than you’d want to see. That said, the majority of those countries are where broadband services, even when they go past the front door, are not in households because they can’t afford it. Even in ‘mature’ and relatively rich broadband markets there are significant shortfalls in take-up due to the cost of a subscription and the kit that goes with it.

“Standards are one component of bringing down the price of a broadband service.  Competition, information and technological advances all make a difference. Mostly however it’s about how much of any saving a supplier can pass on to its customers and to be able to reduce costs at a stroke of a standards pen should bring some immediate relief for the digital divide.”

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