A new report published by the Centre for Telecoms Research believes that consumers will pay on average around £10 per month for high-speed broadband access as intense competition between ISPs lowers the price.
Although users will continue to migrate to faster line speeds over the next five years, the impact of bundle offering will mean that the cost of broadband will be driven down.
The report expects ISPs (Internet Service Providers) to make further discounts on bundled products such as TV and home phone (e.g. from Virgin Media and Sky) which will bring down the average price.
Raj Modi, the research director at Centre of Telecoms Research stated “Although we expect 90% of broadband consumers to be using speeds above 2Mbit/s by 2011 (from around 33% in 2006), we expect ISPs to reap less not more revenue per customer from these services. Competition between ISPs is likely to intensify over the next five years, and this will result in many operators supplying high-speed broadband as a loss leader or as part of a bundled package in hope of cross-selling other services to the customer,”
This may have a big impact on the smaller ISPs who do not have the financial clout to compete on price with the likes of Virgin Media, BT and Sky.
The report also predicts the rise in usage of IPTV and expects 1.5 million customers will be using IPTV (5% of the UK population) by 2011. It also suggests that homes with broadband will increase to 20 million connections by 2011 and implies broadband will be used by 85% of UK home computer users by then too.
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