The UK broadband sector has changed enormously over the last four years and the introduction of more competitive pricing and more providers has seen prices plummet overall. A simple review of the average cost of broadband in the UK reveals that prices have fallen by 40% over the last four years with the average cost now at around £13.61 a month against £23.30 a month just four years ago. So what has instigated this enormous pricing pressure?
The main catalyst to the reduction in UK broadband prices was the “local loop unbundling” which effectively saw broadband providers install their own equipment into BT telephone exchanges up and down the country. This allowed broadband providers to sidestep BT broadband wholesale prices thereby allowing them to introduce their own pricing structures which have turned out to be more competitive than ever. So will we see further reductions in UK broadband prices?
The difficult balancing act in the future will be investment into new broadband technology and new services while attempting to remain competitive in the overall market place. It is highly unlikely we will see anything like the reductions we have seen over the last four years as ultimately Internet users will have to contribute to broadband technology investment in the future.