The “sweet spot” for U.S. home broadband is a monthly recurring cost around $50 and speeds between 100 Mbps and 200 Mbps, which is purchased by about half of all U.S. home broadband customers.
Pricing by independent internet service provider Vyve Broadband shows the packaging reflecting buying patterns. The 200-Mbps package sells for $50 a month. The gigabit package, likely bought by about 11 percent to 12 percent of homes, sells for about $70 a month.
The lowest tier offers 100 Mbps for $40 a month.
It might seem curious, but the new payback analysis for home broadband using fiber to the home also is about $50 per customer location, at take rates close to $50 a month, according to AT&T.
For those of you who follow the payback models for FTTH, that is somewhat shocking, as models from 20 years ago would have assumed per-customer revenue closer to $100 to $130 per month, to make the model work.
That the revenue assumptions have changed so much reflect secular changes (declining demand for fixed network voice and linear video entertainment) as well as changes in cost structure related to operating cost and capital requirements for home broadband as well.
It also is noteworthy that T-Mobile’s 5G home broadband service is priced at $50 a month. Though T-Mobile no longer seems to emphasize “speed,” it had in April 2021 talked about speeds up to 100 Mbps.
Verizon’s 5G fixed wireless has recently been repriced to $50 per month, with speeds up to perhaps 300 Mbps.
All that tells you where the mass market demand is believed to exist. The packaging will change, of course, in terms of typical speeds and prices. "More speed for the same price" as well as "significantly faster speeds for a higher price" are the two trends that will likely remain in place.
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