Worldwide Broadband Prices

Cable.co.uk has updated their comparison of worldwide broadband prices. Their report consists of a spreadsheet that compares broadband prices in 195 countries. If you didn’t know there were that many countries, many of the ones on the list are small island countries. The study considered the products offered by the major ISPs in each country. I assume they are using published prices and not some estimate of speeds that customers actually receive.

It’s not easy to compare broadband products because broadband speeds vary significantly around the world. The spreadsheet ranks countries by monthly price, expressed in US dollars, but you can use the spreadsheet to compare other factors. For example, looking at the cost per megabit provides a different perspective.

The US didn’t fare well in a comparison of overall pricing and came in at 119, with a monthly price for broadband at $67.69. This is down three places from last year. The US price was calculated using 25 ISP packages that had an average speed of 54 Mbps and a price per megabit of $1.26.

The cheapest broadband in the world is in Ukraine where the month price is US $5.00 with average download speed of 112 Mbps. To show how hard these comparisons are to make, the second cheapest broadband is in Sri Lanka with a monthly price of $US $5.56, but an average speed of only 11 Mbps, followed by Iran with a monthly price of US $8.20 per month, but a download speed of only 3 Mbps. The largest country at the top of the rankings is Russia, at number 4, where the average cost of broadband is US $9.77 per month with average speeds of 31 Mbps.

At the bottom of the list were two sub-Saharan countries: Mauritania with an average price of US $768.16 for 6 Mbps and Namibia with an average price of US $383.83 for 22 Mbps. Also at the bottom was Papua New Guinea with an average price of US $571.67 for 7 Mbps.

The US fares a little better when ranking by cost per megabit. With a price of $1.26 per megabit we’re at number 56. Number 1 on this comparison is Singapore with a price of US $0.03 per megabit, due to delivering an average speed of 1.6 Gbps for a price of US $50.43 per month. At the bottom of the list were two other sub-Saharan countries, Somalia and Niger that have average broadband speeds of less than 1 Mbps.

Finally, I compared countries by average Internet download speeds. The US came in at number 39 with an average speed of 54 Mbps. At the top of the list is Singapore with the 1.6 Gbps speed. Second is Jersey, in the Channel Islands off Normandy with a speed of 468 Mbps and Panama with an average speed of 273 Mbps.

Like all statistics there is a story go with all of the various countries. For example, China has an average broadband speed of 98 Mbps with an average price of US $41.29 per month. However, China is similar to the US and their data speed blends cities with gigabit speeds with smaller markets with much slower speeds. Among the countries with fast download speeds are places like Hong Kong, Bulgaria and Ireland where the government has set a priority and dedicated public money to building broadband infrastructure.

Since these comparisons are made using advertised prices and speeds, they don’t represent the total actual cost to consumers. For example, in this country some ISPs jack up the price of broadband by requiring an expensive monthly modem rental. In some markets in the US the ISPs deliver significantly slower speeds than advertised, making the products a lot more expensive on a per megabit basis. Many ISPs here also offer bundled discounts, making the prices lower than advertised. I’ve studied broadband prices in specific US markets and I know how hard it is to understand the real cost of broadband – and I’m sure these sorts of things are true in other countries as well. However, the average price of $67.69 for the US doesn’t seem out of line.

US broadband trends will change our rankings over the next few years. For example, prices by the big ISPs are on the increase, as witnessed by the recent $5 monthly increase by Charter for bundled broadband. Wall Street analysts all expect broadband prices in the US to now increase every year after a decade of stable prices. However, the cost per megabit ought to be tumbling here since the big cable companies recently increased customer speeds unilaterally – meaning millions of US customers now have broadband that is significantly faster than just a year ago.

Even with all of the issues of comparing broadband in countries with widely disparate conditions, this kind of comparison is useful. The main takeaway for me from this table is that most of the economic rivals of the US in Asia and Europe have faster broadband speeds than here, and lower monthly prices. Our trend is to increase broadband speeds, at least in urban areas, but prices are going to climb at the same time. If you look at broadband as a basic utility that’s necessary to be competitive, we aren’t stacking up very well.

Rising Broadband Speeds

For the second year in a row the coalition M-Lab measured broadband speeds in 200 countries. This coalition includes New America’s Open Technology Institute, Google Open Source Research, Princeton University’s PlanetLab and others, compiled by Cable of the UK. The statistics are based upon over 163 million speed tests. The results are available in a spreadsheet and are worth looking at for those that love numbers.

Because the results use speed tests, the vagaries of those tests must be factored into the results. Hopefully all of the reading use the same speed test, because each speed test on the market uses a different algorithm to calculate speed. For example, the algorithm for speedtest.net operated by Ookla discards the fastest 10% and the slowest 30% of the results obtained. Speed tests are overinflated in many instances when ISPs use a burst technology that provides a faster broadband speed for the first minute or two or any web connection. The results are also lowered due to any network issues at a customer such as an underperforming WiFi network. The bottom line is that any given speed test number must be taken with a grain of salt, but comparing millions of speed test results ought to make a valid relative comparison.

Overall the tests show a worldwide increase in broadband speeds in just one year of 23%. However, to put that in perspective that’s an increase worldwide going only from 7.4 Mbps to 9.1 Mbps. It’s more interesting to look at the results from the countries with the fastest and slowest broadband. The top 25 fastest broadband countries on the list increased speeds by 28.9% while the bottom 25 only increased by 7.4%.

The US moved up one slot, from number 21 to number 20 to this year – increasing average speeds from 25.0 Mbps to 25.9 Mbps. This is a substantial increase that I think can be attributed to three factors. The most significant is probably that several large cable companies have unilaterally increased base speeds due to the introduction of DOCSIS 3.1. Average speeds also continue to climb as several million customers per year migrate from DSL to cable modems. Finally, we are slowly building fiber to residences and probably added a few million fiber passings last year.

The worldwide broadband leader is Singapore with an average speed of 60.4 Mbps. They are followed by Sweden, Denmark, Norway, Romania, Belgium and the Netherlands. Romania is interesting because they rose 13 places with a jump in speed from 21.3 Mbps to 38.6 Mbps – they obviously have been implementing a lot of fiber. The biggest drop on the chart is Hong Kong that fell 10 places on the list as their broadband speeds dropped slightly from 27.2 Mbps to 26.5 Mbps. It wasn’t too many years ago when Hong Kong was way ahead of the US, but that gap has completely closed.

One of the more important things this research shows is that good broadband can be found in North America, most of Europe and some of southeast Asia. Broadband speeds everywhere else are far behind. The gap between the haves and have-nots is growing. The increase in average speeds for the top 100 countries on the list was 5.4 Mbps in one year while the increase for the bottom countries was only 0.4 Mbps.

It’s also worth remembering that speeds differ within each country. In this country we still have millions of rural homes that have no Internet access or access at third world speeds. The same is likely true around the world with better broadband in urban areas compared to rural areas. It’s also worth remembering that only about 4.1 billion people, or 54% of the population of the world have access to broadband.

These kinds of statistics are useful because they probably act as a goad to governments that are far down the list to find ways to improve broadband. We know that good Internet brings a huge number of economic and other advantages, and countries with good broadband are implementing new technologies that aren’t going to be available in countries with slow broadband networks.

There is hope for those areas with little or now broadband. Several groups are proposing satellites that can bring broadband everywhere. Endeavors like Google’s Loon are looking at bringing broadband to rural areas across the globe. Hopefully we will see speeds in the third world increasing significantly over the next decade. While only in the second year, the work being done by M-Lab is another good measuring stick for governments to measure their progress.

Cisco’s Latest Web Predictions

cheetah-993774Cisco recently published their annual Visual Networking Index and as usual it’s full of interesting facts and predictions. Here are a few of the key highlights that I think small carriers will find interesting:

Busy-hour (or the busiest 60–minute period in a day) Internet traffic increased 51 percent in 2015, compared with 29–percent growth in average traffic. And it’s expected to continue to grow faster with Cisco predicting that by 2020 busy hour traffic will have increased 4.6 times while overall web usage will only double. This is a big change for network providers. Since the advent of web video we’ve seen the evenings become the busiest times on the web, but this trends shows that the evening usage is going to be far greater than the rest of the day. If a network wants to offer a satisfactory service they must design to satisfy the busy evening hours, which in four short years will be over four times busier than today.

Telco companies remember that this was the same historical pattern for voice traffic and now we see the same thing with residential broadband. It means networks must be engineered for the busy hour and are underutilized the rest of the time. Failure to design for this growth means customer dissatisfaction during the busiest hours. It also implies growing demand for faster speeds.

IP video traffic will be 82 percent of all consumer Internet traffic by 2020, up from 70 percent in 2015. As you might expect, much of the increased data traffic on the web will be driven by video and more people use the web for entertainment.

Globally, Internet traffic will reach 21 GB per capita by 2020, up from 7 GB per capital in 2015. This demonstrates that the total amount of data on the web is going to continue to grow at a torrid pace. Part of this growth will come by adding new users to the web, but web traffic everywhere is still growing rapidly.

Broadband speeds will nearly double by 2020 . . . global fixed broadband speeds will reach 47.4 Mbps, up from 24.7 Mbps in 2015. So, not only Internet volumes grow, but customers are going to demand faster speeds. These numbers are a little deceptive in that they combine business and residential fixed broadband speeds together. But still, service providers need to be prepared to increase customer speeds to keep them happy. Expect networks that can’t increase speeds to grow increasingly unpopular.

Business IP traffic will grow at a CAGR of 18% from 2015 to 2020. It’s easy to assume that video is causing consumer data usage to grow much faster than business usage, but business broadband demand is growing almost as quickly as consumer broadband demand.

Smartphone traffic will exceed PC traffic by 2020. This is pretty amazing considering that in 2015 PCs drove 53% of all web traffic while smartphones generated only 8%. But by 2020 Cisco is predicting that traffic from PCs will fall to 29% and traffic from smartphones will grow to 30%. Of course, in North America with our extensive WiFi, a lot of this smartphone traffic will end up on landline connections. To reach these numbers, mobile broadband usage will grow 53% per year through 2020.

The Continued Growth of Broadband

Broadband sales continue to boom at Comcast and Time Warner and the largest cable companies as a group added over 787,000 customers in the third quarter of the year. The largest telcos lost 143,000 customers for a net increase of 644,000 new broadband customers for the quarter. Not included in these numbers are the small telcos and cable companies as well as the FTTP providers and municipalities.

The counts for the largest companies are as follows for the quarter:

‘                                                           End of 3Q                   New in 3Q

Comcast                                              22.9 M                         320,000

Time Warner Cable                            13.0 M                         246,000

Charter                                                  5.4 M                         147,000

Cablevision                                           2.8 M                              3,000

Suddenlink                                            1.2 M                           21,600

Mediacom                                             1.1 M                           16,000

WOW                                                      0.7 M                              (800)

Cable ONE                                             0.5 M                              (171)

Other large cable companies              6.7 M                          35,000

Total Large Cable                                54.3 M                        787,629

AT&T                                                     15.8 M                      (129,000)

Verizon                                                   9.2 M                            2,000

CenturyLink                                           6.1 M                         (37,000)

Frontier                                                  2.4 M                          27,000

Windstream                                           1.1 M                        (11,200)

FairPoint                                                 0.3 M                          (1,338)

Cincinnati Bell                                       0.3 M                            6,200

Total Large Telcos                                35.2 M                      (143,338)

Total Large Companies                       89.5 M                        644,291

You have to be a little careful in looking at the telco numbers because many of those companies are seeing increases in higher bandwidth products while seeing continuing erosion in the older and slower DSL products. For example, Verizon FiOS added 114,000 fiber customers for the quarter but lost almost the same number of DSL customers. AT&T said they gained 172,000 IP broadband customers, which is a combination of those on U-verse and fiber.

The 89.5 million broadband customers of these large companies represent over 66% of all households in the country (135 million total households). These companies actually serve more customers than shown. For example, there are many cases where these companies sell broadband to an apartment owner that then distributes it to the apartment units.

For the cable companies the quarterly increase of 787,629 is an annual growth rate of 5.8% and will annualize out to over 3 million new broadband subscribers. It’s obvious that more and more households are finding it mandatory to have a broadband connection and the whole market keeps creeping upward.