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Cable Technology Feature Article

August 03, 2010

Businesses Subsidize Consumers

By Bob Emmerson, TMC European Editor

Data from Point Topic on the worldwide cost of business and residential bandwidth indicates some interesting patterns. Businesses are subsidizing consumers, which isn’t surprising since that has always been the telecommunications model. But the best place for a business to be is in North America and the worst place for consumers is … can you guess? It’s North America.    

In the USA and Canada a company will pay 2.38 times as much for a DSL connection as a household. This compares to a multiple of 4.23 on average in the Rest of the World.

In North America a business will pay 1.13 times as much as a household for FTTx and 1.89 times as much for a cable service. In the RoW a business will on average pay 6.47 times as much for FTTx and for cable the multiple is 1.93.

The result is that households in North America will pay between 10 percent and 20 percent more for their broadband service than their counterparts in other regions.

The gap is at least partly due to the differential in residential and business tariffs. North American operators are extracting a better ARPU from their household services while sacrificing some revenue from companies.

Bob Emmerson is TMC's (News - Alert) European Editor. To stay abreast of the latest news affecting the European market, check out Bob's columnist page.

Edited by Juliana Kenny