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MEMO/09/129

Brussels, 25 March 2009

Faster and cheaper broadband: Commission study shows significant fall in prices in 2008 in Europe

European consumers paid less for their fixed broadband internet access (DSL, cable modem, fibre) in 2008 than a year ago according to a study released today by the European Commission. However, there are significant differences between Member States in broadband retail prices and cost structure for similar products. EU rules should be consistently applied in a telecoms single market for all businesses and consumers equally.

"European users now enjoy higher broadband speeds at lower prices thanks to more competition in the broadband market," said EU Telecoms Commissioner Viviane Reding. "The right combination of competition between companies and regulation means that prices are down and internet speeds are up. The majority of European broadband users can get online at speeds of above 2 Megabits per second, a speed that allows TV over internet, at cheaper prices. The trend is good but there are still important differences in prices between countries. We need to ensure a Single Market for telecoms by having a consistent set of telecoms rules for the whole of the EU."

The study, released by the Commission today, looks at the cost of retail broadband access in the EU and other countries. It compares the price of broadband subscriptions in seven groups ("baskets") at different download speeds for broadband via DSL, cable modem and fibre. Higher speeds allow faster downloads of rich and better quality services like video streaming.

The study shows that:

  • Average monthly prices for broadband subscriptions fell in the EU between April 2007 and April 2008.
  • The average monthly price of broadband access with download speeds between 1 and 2 megabits per second (Mb/s) fell by 19% from € 38.2 per month in 2007 to € 31 in 2008.
  • The price of broadband with 2-4 Mb/s download speed fell by 29% in 2008. The average monthly subscription fell to €37 a month in 2008 compared to €52 per month in 2007.
  • Prices for broadband connections with 4-8 Mb/s fell to € 46.6.per month in 2008, down 4% (€ 48.6) since 2007.
  • For the 4% of European broadband consumers who opt for lower speed broadband connections, (144-512 kilobits per second), prices went up by 7%, from €28.2 to €30.2 per month in 2008.
  • Broadband access costs are, on average, higher in the New Member States than in the EU 15, except for two baskets (1-2 Mb/s incl. and + 20 Mb/s).

Although, broadband providers have the option to impose limits on the time or data downloads in the monthly subscriptions they offer their customers, the study shows that around 80% of offers in the EU are unmetered.

Background

The study analysed about 1,800 retail broadband offers from 147 Internet Service Providers in the EU and other countries. As structures of broadband offers differ in terms of speeds, caps in data transfer and installation costs, the report compares prices between capped and uncapped offers using a methodology that compensates for these technical differences. It groups offers into the different speed baskets or profiles listed in the annexed graph.

The report provides information on both the least expensive offer available on each national market as well as on the median price.

The study was carried out for the European Commission by Van Dijk Management Consultants. It looked at offers available in April 2008 and results for October 2008 will be available in spring 2009.

About 23% of European citizens subscribe to broadband nowadays, and a large majority of them use connections above 2 Mb/s. However, there is often a gap between what subscribers are offered and the speeds they effectively get when they download web services. The Commission will soon launch a study to measure this gap and will continue monitoring prices to make sure that consumers get a fair deal from their subscriptions.

Before the summer, the Commission will propose a new European broadband strategy to promote 100% coverage of broadband and to assist the transition to higher speed internet for both fixed and mobile internet

The study can be downloaded at

http://ec.europa.eu/information_society/eeurope/i2010/benchmarking/index_en.htm

Annex
[ Figures and graphics available in PDF and WORD PROCESSED ]


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