New Research Shows High Bandwidth Online Services Create Demand for Faster, More Expensive, Broadband
9/5/2013
Brussels - The Computer and Communications Industry Association
(CCIA), the international organisation
for the Internet industries, is today releasing two studies about the
21st century consumer and broadband. These precede the likely adoption of a
Regulation on telecommunications by the European Commission next week.
First, a survey
of 934 consumers in Italy, France and Germany confirms that the reason
consumers pay for broadband is to access content, applications and services.
Even more importantly for the telecommunications industry in Europe, the reason
that consumers upgrade to a faster, more expensive, connection is to improve
their Internet experience and to use high bandwidth services such as online
video and TV.
The survey shows that consumers using higher bandwidth services
are more likely to upgrade to a more expensive connection with 40 percent of
those making video calls having upgraded in the past year and 49 percent of
those uploading video. Overall, 31 percent of consumers polled would be willing
to upgrade, but 39 percent of those who have already upgraded would be
willing to upgrade further, demonstrating that faster speeds and use of high
bandwidth services increase expectations and create a virtuous cycle.
Secondly, a study
of consumer behaviour towards switching broadband providers shows that in most
European countries consumers stay with their ISP for 10 years or more, with
less than 10 percent changing providers annually. Moreover, the level of
switching has reduced by half in the last 5 years, possibly due to the increase
in bundled offers. In addition, 62 percent of EU27 consumers have never
considered switching to another provider.
James Waterworth, Vice-President of CCIA said, “Consumers pay for
broadband to access content and services online, not because it looks nice.
Unfortunately, the market for broadband is not as dynamic as is imagined. Given
that consumer switching (the churn rate) is down 50 percent in Europe in the
last 5 years, and that 63 percent of EU consumers don’t know what speed they
should be getting, consumers cannot effectively ‘police’ ISP behaviour with
regard to blocking or prioritising online services.”
“The value of the Internet economy is so great that European
policymakers need to act to guarantee an open Internet in the upcoming
Regulation on a single market for telecommunications. Switching broadband
providers is complicated if you take broadband, TV, mobile and fixed telephony
from the same provider. The commercial market alone will not preserve an open
Internet and BEREC analysis shows that hundreds of millions of Europeans have
online services blocked.” Waterworth said.
The survey of consumers in Italy, France and Germany was conducted
by ICM Research and the survey and analysis entitled ‘Consumer Lock-In for
Fixed Broadband’ by Robert Kenny and Aileen Dennis of Communications Chambers.
