The distance of 1,004 miles between the two remotest
schools in the UK, Five Islands School in the Scilly
Isles, south west of Cornwall, and Baltasound Junior
High School in the Shetland Islands, north of Scotland,
was virtually bridged in October 2005, when the
two schools acquired Broadband Internet connection,
some 40 years after they had been 'twinned' (Source:
BT). This move follows the steps of British Telecom
to upgrade telephone exchanges in remote geographical
areas, in an attempt to eliminate the rural 'digital
divide'. Further to this, the South West of England
Regional Development Agency (RDA) announced earlier
this month that works to upgrade Cornwall's final
telephone exchange had already started, in order
to bring Broadband technology up to 99.8 per cent
(from 99 per cent) of the region's population (Source:
SWRDA).
High Speed or Broadband Internet access has been
amongst the prevailing 'buzzwords' in Internet debates
for at least five years now, with the proportion
of UK Broadband households almost quadrupling between
April 2003 - July 2005, to reach 31 per cent of
the total number of UK households (Source: ONS).
In practical terms, Broadband is the technological
vehicle that permits permanent, usually un-metered,
access to the Internet via one of the two most common
Broadband delivery platforms: DSL (Digital Subscriber
Line) or connection through cable. Unlike Narrowband
(or dial-up) connections, in which access speed
is normally up to 56 kbit/s, Broadband typically
offers higher Internet access downstream speeds,
which, despite their differences in the definitions
provided by the various Governments, range between
512 kbit/s up to 20 Mbit/s.
The last twelve months have seen Broadband uptake
moving on a sharp upward curve across a number of
European markets and 2006 is expected to witness
further progress of the Broadband trajectory with
service providers increasing speeds while keeping
monthly fees relatively unchanged. Across the UK,
99.8 per cent of homes and businesses are currently
connected to a broadband-enabled telephone exchange,
enabling them to acquire a Broadband connection.
In European terms, the Broadband penetration rate
currently stands at approximately 12 per cent amongst
EU15, with the Scandinavian countries having the
highest penetration rates (i.e. Finland at 18.70
per cent, Denmark at 22.00 per cent, and the Netherlands
at 22.40 per cent) (Source: Eurostat, 2005).
Tarifica has researched the current Broadband (ADSL)
offerings of the incumbent operators in five key
European markets (UK, France, Spain, Italy, and
Belgium) and compared them with the prices from
a year earlier (January 2005), in order to identify
potential trends and movements in the pricing strategies.
In the UK, BT's 'BT Broadband Basic' plan attracted
a monthly charge of GBP 15.31 (VAT excl.) providing
a downstream speed of up to 512 kbit/s with an inclusive
monthly allowance of 1 GB in January 2005, while
today the same plan (now renamed to 'BT Option 1')
offers double the inclusive allowance (2 GB) with
double downstream speed (up to 2 Mbit/s) for the
same rental charge. In addition, 'BT Option 4',
the most expensive of the operator's ADSL plans,
offers an inclusive monthly usage of 40 GB with
a download speed of up to 2 Mbit/s for GBP 25.92
(VAT excl.) per month, whereas a year ago the same
plan (then named 'BT Yahoo! Broadband') offered
30 GB inclusive allowance per month and a speed
of up to 1 Mbit/s for the same price.
Similar trends may also be identified in the other
European markets that were researched. Graph 1 below
compares the current monthly rental charges of selected
ADSL packages available from the incumbent operators
in France, Spain, Italy, and Belgium with the ones
from a year earlier (January 2005). For reasons
of consistency in the comparison, packages have
been selected across operators on the basis of the
nearest download speed available from the operator,
so that a comparison can be made amongst price plans
that offer similar ADSL speeds (these are indicated
in the graph next to the plan name). A close look
at the graph may reveal two prevailing trends: operators
have either dropped the monthly charges of the ADSL
plans that were researched, while keeping the downstream
ADSL speed unchanged, as in the case of France Telecom
and Telefonica (Spain), or they have kept the same
monthly rental fee whilst increasing the downstream
speed available on the specific price plan, as in
the case of Telecom Italia and Belgacom (France
Telecom has also increased the upstream speed of
its 'Internet Max' plan from 256 kbit/s to 800 kbit/s,
while Belgacom increased the upstream speed of its
'ADSL Go' plan from 192 kbit/s to 256 kbit/s).
notes:
