This chart showing typical monthly costs and typical speeds illustrates why the internet access business is so challenging. Note that typical monthly charges are the same, whether we compare slow copper connections or faster cable TV and telco connections using optical fiber.
In other words, there is a tendency in the internet access business for capacity supplied to grow but for revenue to remain flat.
Keep in mind that this study of published tariffs shows “average” prices across a range of products using the pricing power parity method, which normalizes prices across countries to account for currency effects.
In the absence of specific detail on whether median or mean figures are used, I assume the stated prices and speeds use the mean. But the biggest impact on stated prices is the use of PPP to normalize local prices across countries.
One often hears that the typical U.S. home broadband account generates $50 per month. Using PPP, that normalizes to $94 per month. Other countries whose monthly recurring charges often appear to be lower, are higher when using PPP.
In most regions, prices are dropping. In South and East Asia prices are stable. Only in North America are prices rising. That appears to be a byproduct of customers migrating to higher-priced service packages that run at faster speeds, as well as speed increases by ISPs.
In the first quarter of 2022, for example, about half of accounts operated at speeds between 200 Mbps and 400 Mbps. A year earlier, half of customers purchased plans operating between 100 Mbps and 200 Mbps, according to Openvault data.
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