London 12th October 2011 - European broadband tariffs decreased by 17% during the third quarter of 2011

 

The most significant findings from Quantum-Web’s comparative analysis of Q3 2011 broadband tariffs for 42 European markets include:

• Many operators have waived the non-recurring costs of their broadband packages.
• There is a growing tendency among broadband operators to offer one price across different broadband packages.
• European broadband tariffs decreased by an average of 17% during the third quarter of 2011.


Quantum-Web’s tariff analysis of more than 2,000 fixed and mobile broadband packages in the third quarter of 2011 shows that a large number of European telcos slashed their set-up, connection and hardware fees during that quarter. This wave of promotional activity is a complex form of pricing policy. Operators are trying to maintain broadband market share by giving away devices and decoders, and minimising their revenue from any other form of non-recurring fees at the expense of losing a slice of their broadband revenue. Once the Q4 2011 financial and operational results are published it will be possible to assess how successful this strategy has been. To what extent this marketing strategy has succeeded can be assessed once the Q4 2011 financial and operational results are published.

Many European operators adopted a new promotional pricing strategy in Q3 2011, selling very high speed broadband packages at the same price of much lower bandwidth offers. Companies adopting this approach include (Cabovisao in Portugal) which for example, is selling 10 Mbps Triple Move, 30 Mbps Triple Move and 10Mbps Triple Digital Move at €18.99 per month for the first 3 months of a new contract , Vodafone (Germany), Jazztel (Spain), Wind (Italy), KPN (Netherlands), Cgates (Lithuania) and Telenor (Norway) are offering similar promotions.
Quantum-Web believes this approach will reduce churn and help migrate customers to higher bandwidth packages. It enables broadband customers to try out applications and services which are available only with very high speed broadband packages in the hope that they will not want to revert to lower speed, lower ARPU packages if the price of the higher speed package increases.

European broadband tariffs decreased by an average of 17% in Q3 2011, compared with the previous quarter, according to a panel data analysis (Graph 1). The fall was driven by lower non-recurring costs, and price promotions.

 

The Q3 2011 European Broadband Tariffs Analysis is based on rigorous research of more than 2,000 broadband tariffs for 186 operators in 42 countries.

For more information about the findings of this press release and the European Broadband Tariffs Database or Quarterly Broadband Tracker contact Qmars Safikhani, Head of Analytical Research at Quantum-Web +44 (0) 20 3286 9570 or
qmars.s@quantum-web.com