This article talks of a highly-competitive broadband Internet-service that exists in the US and Europe, with this aided and abetted by the provision of lower-cost prepaid mobile broadband services with generous usage caps and the provision of multiple-play services by the ISPs. In some countries like the UK and France, this would be augmented by telecommunications competition regulations that “have teeth” and the willingness for telecommunications regulators like OFCOM (UK) and ARCEP (France) to enforce these regulations.
In the case of multiple-play (triple-play) services, the ISPs can make up for the low-cost Internet through highly-differentiated telephone and pay-TV packages as well as selling or leasing-out hardware for these services.
But there are some other factors worth considering here. One would be that the cost of a regular cable or ADSL fixed-line service would be going downhill because most of the countries are rolling out fibre-optic-based “next-generation broadband”. Here, users who are technologically “switched on” would head to these services and the ADSL services would then be freed up and sold to most people who have regular broadband needs at a “dime-a-dozen”. It would then make the “modest-bandwidth” services become less valuable to the ISPs and these would be sold as “entry-level” services while existing customers would be shifted up to the higher-bandwidth services.
In Australia, we are missing out on this because we have a series of problems:
- The role of the universal telephony service provider is on Telstra’s hands with people who buy Telstra’s discretionary services like Internet or mobile-telephony service bearing the cost of them furnishing this basic requirement through high costs or reduced download quotas.
- Reduced infrastructure-based competition between mainstream telcos for Internet and mobile-telephony service with some operators charging others a premium to use their infrastructure.
- Higher costs and reduced international-link competition that also keep the Internet costs high.
At least the broadband issue has been one of the main playing cards in the last Federal election. This could put everyone “on notice” about the providing of cost-effective Internet service across the country.