ERT
14-04-2009, 02:08 PM
Price competition likely as more ISPs start offering 100Mbps plans
By Chua Hian Hou
April 14, 2009 Tuesday
CONSUMERS can expect more Internet service providers (ISPs) to launch 100Mbps consumer broadband services next year at about $75 a month or less.
Two such high-end offerings now available cost almost $90 a month.
The impetus to make available more choices in high-end broadband services is Singapore's upcoming broadband network, portions of which will be up by the middle of next year.
StarHub, awarded the tender to install the hardware for this network, will sell ISPs access to it at a wholesale rate of $21 per 100Mbps for residential lines.
This price is much lower than what ISPs offering consumer broadband services now pay StarHub or SingTel to piggyback on their networks: StarHub charges $21.56 for a 2Mbps line and $35.71 for a 100Mbps line; SingTel's charges range from $15 for a 512kbps line to $34 for a 10Mbps line.
Aside from these charges, ISPs also have to factor their other overheads - billing, customer service, overseas bandwidth charges and their profits - into the final price they now charge their customers for Internet access.
Mr Foong King Yew, consulting firm Gartner's research director for carrier operations and strategies, said the lower price was likely to lure new players into launching 100Mbps packages.
These are now available only from StarHub and M1 at almost $90 a month.
A back-of-the-envelope calculation shows that an ISP like M1, which now uses the StarHub network for its 100Mbps broadband package, will save about $15 by switching to the new network - savings it could pass on to its consumers.
A number of ISPs, including SingTel, Pacnet and LGA, have said they will look into how they can tap the new network.
Pacnet's managing director for Asia Richard Carden said the ISP is now 'assessing the opportunities that this project introduces ...to our consumer and business customers in Singapore'.
Mr Yew Hock Meng, the chief operating officer of LGA Telecom, an ISP which sells corporate Internet access, also said it does not rule out launching consumer services 'under the right market conditions'.
Consumers can thus expect some 'price competition' among ISPs, said advisory firm Ovum's research director David Kennedy. This in turn will further lower the cost of blazing-speed Internet access.
Mr Foong believes that as the prices of high-end services fall, those of the lower-end ones will follow suit.
If consumers using lower-end services can get 100Mbps service at just slightly more, they will make the switch, so 'ISPs will have no choice but to lower the cost of their lower-speed services', he said.
StarHub charges $57 a month for a 12Mbps line while SingTel charges $48 for its 10Mbps service.
Consumers are waiting eagerly for the benefits of the new network. Mr Bryan Lim, for example, has decided to hold off renewing his broadband contract when it expires in September.
The 21-year-old NSman said he has so far renewed his contract to get free gifts or discounts.
'But I will wait this time around because there could be even better offers if a new player wants to come in and grab market share from SingTel and StarHub
This reporter failed to specify that the 100Mbps is LOCAL bandwidth. Cost of overseas bandwidth remains sticky even with the pending advent of NBN. As usual, lack of indepth & independent thought process is evident from their report quality.
My prediction: When the NBN comes online, ISPs are likely to kill off low end plans. And if all ISPs decides to act in cartel & do so, consumers will be left with no choice but to subscribe to plans that offers high bandwidth that they are currently using and thus end up paying more. Because internet connectivity for some individuals & families is an essential service.
By Chua Hian Hou
April 14, 2009 Tuesday
CONSUMERS can expect more Internet service providers (ISPs) to launch 100Mbps consumer broadband services next year at about $75 a month or less.
Two such high-end offerings now available cost almost $90 a month.
The impetus to make available more choices in high-end broadband services is Singapore's upcoming broadband network, portions of which will be up by the middle of next year.
StarHub, awarded the tender to install the hardware for this network, will sell ISPs access to it at a wholesale rate of $21 per 100Mbps for residential lines.
This price is much lower than what ISPs offering consumer broadband services now pay StarHub or SingTel to piggyback on their networks: StarHub charges $21.56 for a 2Mbps line and $35.71 for a 100Mbps line; SingTel's charges range from $15 for a 512kbps line to $34 for a 10Mbps line.
Aside from these charges, ISPs also have to factor their other overheads - billing, customer service, overseas bandwidth charges and their profits - into the final price they now charge their customers for Internet access.
Mr Foong King Yew, consulting firm Gartner's research director for carrier operations and strategies, said the lower price was likely to lure new players into launching 100Mbps packages.
These are now available only from StarHub and M1 at almost $90 a month.
A back-of-the-envelope calculation shows that an ISP like M1, which now uses the StarHub network for its 100Mbps broadband package, will save about $15 by switching to the new network - savings it could pass on to its consumers.
A number of ISPs, including SingTel, Pacnet and LGA, have said they will look into how they can tap the new network.
Pacnet's managing director for Asia Richard Carden said the ISP is now 'assessing the opportunities that this project introduces ...to our consumer and business customers in Singapore'.
Mr Yew Hock Meng, the chief operating officer of LGA Telecom, an ISP which sells corporate Internet access, also said it does not rule out launching consumer services 'under the right market conditions'.
Consumers can thus expect some 'price competition' among ISPs, said advisory firm Ovum's research director David Kennedy. This in turn will further lower the cost of blazing-speed Internet access.
Mr Foong believes that as the prices of high-end services fall, those of the lower-end ones will follow suit.
If consumers using lower-end services can get 100Mbps service at just slightly more, they will make the switch, so 'ISPs will have no choice but to lower the cost of their lower-speed services', he said.
StarHub charges $57 a month for a 12Mbps line while SingTel charges $48 for its 10Mbps service.
Consumers are waiting eagerly for the benefits of the new network. Mr Bryan Lim, for example, has decided to hold off renewing his broadband contract when it expires in September.
The 21-year-old NSman said he has so far renewed his contract to get free gifts or discounts.
'But I will wait this time around because there could be even better offers if a new player wants to come in and grab market share from SingTel and StarHub
This reporter failed to specify that the 100Mbps is LOCAL bandwidth. Cost of overseas bandwidth remains sticky even with the pending advent of NBN. As usual, lack of indepth & independent thought process is evident from their report quality.
My prediction: When the NBN comes online, ISPs are likely to kill off low end plans. And if all ISPs decides to act in cartel & do so, consumers will be left with no choice but to subscribe to plans that offers high bandwidth that they are currently using and thus end up paying more. Because internet connectivity for some individuals & families is an essential service.