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Moving to fiber is a matter of price

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The pricing policy of telecommunications operators offering fiber in Europe shows different options, from betting on differentiating services, with higher prices, to the aggressive promotion of a shift from ADSL to FTTH services.

According to the IDATE study for FTTH Council Europe, the number of countries in which the price of triple play packages over optical fiber is similar to that of the offer in ADSL is increasing, a harmonization trend that makes the cost per Mbps more low in fiber offerings.

Among the biggest differences in price, the consultant highlights the case of Telefónica and Sonaecom. While the Spanish incumbent charges 86 euros for the triple play fiber service, the cost of ADSL at 6 Mbps is 44 euros, which results in a cost of more than 7 euros per Mbps in this technology compared to 3 euros per Mbps in FTTH. In the case of Sonaecom, the fiber offer costs 65 euros, which compares with 30 euros in ADSL.

The case of Free, in France, is highlighted as a unique strategy: the fiber offer is an exact replica of the triple play in ADSL, both costing 30 euros per month. The consultant recalls that in this way the ARPU has to be increased with value-added services, such as Video on Demand.

According to IDATE, in many cases the pricing strategy seems to reflect a desire to gradually switch customers from ADSL to fiber, as the differences in associated services are still small and the price per megabit is lower for FTTH solutions.

Global differences

At the global level, the capacity offered is also a differentiating factor. In Europe the fastest offer is 100 Mbps, although with the exception of some services at 1 Gbps that start to appear in Europe but which are more common in Asia. The price of triple play offers varies between 29 and 65 euros per month, and the average is around 37 euros per month for the operators included in the study.

Prices in the United States are the most expensive, with Verizon charging 115 euros a month for 50 Mbps, double what is charged in Europe.

The lowest prices are found in Asia. The cheapest is KT in South Korea, which charges only 17 euros for an offer at 50 Mbps, while SK in South Korea charges only 24 euros for a 100 Mbps service that includes TV. In Taiwan, Chunghawa Telecom charges 25 euros a month for the same speed.