Internet Access Speeds Change, Consumer Demand Not So Much

About 51 percent of U.K. customers now buy broadband operating between 30 Mbps and 100 Mbps, according to Ofcom. A quarter of households buy services running slower than 30 Mbps.

About 20 percent purchase services at speeds between 100 Mbps and 300 Mbps. About three percent buy service at speeds greater than 300 Mbps. 

source: Ofcom 

From a supplier’s point of view, increasing available speeds without the ability to boost revenue is an unattractive option. Consumers, for their part, always evaluate speed versus price, buying based on value. They tend not to buy the “best possible” service, but packages that represent value: “enough value for a reasonable price.”

The same dynamics happen in the U.S. market, where in the fourth quarter of 2020, about 8.5 percent of customers purchased gigabit speed access. 

Fully half of U.S. customers purchased service operating at speeds between 100 Mbps and 200 Mbps, according to Openvault. 

source: Openvault 

By about 2025, Ofcom expects the percentage of households buying service at speeds greater than 300 Mbps to remain at about the same percentage of U.K. households. But customers purchasing service at speeds between 80 Mbps and 300 Mbps could grow to 23 percent of households. Roughly half of customers will buy service operating between 55 Mbps and 80 Mbps. 

source: Ofcom

Consumer broadband always is a combination of supply and demand: what internet service providers are willing and able to provide to customers with value and price sensitivities. And Ofcom forecasts suggest a fairly stable market over the next five years.