Wednesday, May 13, 2020

Demand for Internet Access Appears to be a Bell Curve

In 2019, about two percent of fixed network internet access accounts operated at 300 Mbps or higher, according to Ofcom. Some 16 percent of subscriptions offered speeds between 100 Mbps and less than 300 Mbps.


Fully 53 percent of accounts operated at rates between 30 Mbps and 100 Mbps. About 25 percent offered speeds between 10 Mbps and less than 30 Mbps. 


source: Ofcom


The takeaway is that U.K. consumers do not buy the fastest-available speeds and service plans. Fully 80 percent of customers buy services in the middle of the range, between 10 Mbps to less than 100 Mbps. 


That has clear implications for internet service providers and policymakers: headline speed races notwithstanding, most consumers buy services well short of the highest advertised rates. 


To the extent that infrastructure cost and speed are correlated, it might not always make sense to require or deploy facilities that push the speed boundaries. Most consumers probably will not buy them.


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