Consumers suffer from geographic lottery for broadband, new studies reveal
26 Mar 2014 02:49 PM
Europe’s 400m Internet users face a
geographic lottery regarding the price, speed, and range of choice of broadband
– according to EU data released recently. Four new studies show there is
virtually no pattern or coherence in broadband markets across the
EU.
-
Prices for the most common broadband connections can be
up to four times higher in some Member States, even after a purchasing power is
taken into account
-
66%
of people do not know what Internet speed they have signed up
for.
-
Consumers only get 75% of the broadband speed they sign
up for, on average
While successive waves of telecoms sector reform by the
European Union have helped transform the way telecoms services are delivered in
the EU, the sector still operates largely on the basis of 28 national markets.
Both customers and operators face differing prices and rules. The European
Parliament next week will vote on the Commission’s plans for a #Connecte
dContinent which address these problems by offering consumers more
transparency, more rights and better services.
Massive price differences for #broadband
-
Karolina, 35, is moving from Lithuania to Poland. She
will pay at least double in her new home for a similar quality broadband
service. She could pay up to 14 times more.
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Peter, 65, is retiring to Cyprus from United Kingdom. He
will pay between two and four times more for what is probably a slower
connection.
-
Carlos is moving back to his home town in Spain from
France. He will have to shop around carefully since Spanish broadband prices
can be up to 50% higher than he is currently paying.
European Commission Vice-President @NeelieKroesEU said: "There
is no single market for internet and that has to change. There is no good
reason why one person should pay over 4 times more than another in Europe for
the same broadband.”
Today’s new study shows up to 400% price
difference between EU countries in advertised broadband offers in the 12-30
Megabits per second (Mbps) category of fixed broadband that most Europeans
subscribe to. Prices start from €10 to €46 per month, depending on
where you live, and could be as high as €140 per month.
Price contrasts: the cheapest advertised broadband is
available in Lithuania (from €10.30), Romania (from €11.20) and
Latvia (from €14.60); in other countries, the lowest available offer can
be as high as €46.20 (Cyprus), with Spain (€38.70) and Ireland
(€31.40) not far behind. The biggest domestic price range is in Poland,
with offers ranging from €20 up to €140, and Croatia – from
€30 up to €121.
Source: EC services based on study by Van Dijk. Prices refer
to February 2013, are in euros/month including VAT and are adjusted for
Purchasing Power Parity.
While some differences between markets can be explained by
different underlying costs and incomes, much of today’s inconsistency is
due to persistent market fragmentation. The #ConnectedContinent will help overcome these price differences by giving
greater power to consumers and a friendlier environment for investors across
the EU Single Market, allowing efficient operators to sell their services to
consumers in other countries.
Understanding what you get when you buy
broadband
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Anna has moved out of her parents' home and she
needs an Internet connection. She researches what is on offer, but she finds it
hard to compare the options. Once she eventually makes a choice, the connection
is often slower than she expected.
-
Thomas was attracted by the "up to 30 Mbps"
download speed advertised in his neighbourhood. He signed up for 12 months but
the actual speed he receives is 22 Mbps, not 30.
Another study, by @SamKnows, took more than 7 billion
measurements of the Internet connections of nearly 10,000 volunteers and found
actual download speeds can be as little as 64% of what is
advertised.
Type of connection
|
%
of advertised speed achieved
|
Cable
|
89.5%
|
Fibre (FTTx)
|
82.7%
|
Copper (xDSL)
|
63.8%
|
European Commission Vice-President @NeelieKroesEU said: “While
underlying networks are improving, the gap between advertised and actual speeds
is as wide as in 2012. This confirms the need to strengthen and harmonise
consumer rights as proposed in our Connected Continent package.”
“And it is time for companies to work together to
find better ways to advertise and explain their products. That’s the
reaction to these findings that I am hoping for.”
The
proposed #Connecte
dContinent reforms will bring new rights, such as the right to plain
language contracts with more comparable information. In particular operators
will have to provide accurate information about the actually available data
speed. Consumers will have greater rights to switch provider or contract, the
right to walk away from your contract if promised Internet speeds are not
delivered, and the right to have emails forwarded to a new email address after
switching Internet provider.
Volunteers needed:
@SamKnows will run until end 2014 and
one more annual measurement is planned. European consumers can measure their
own ISPs performance by joining a community
of volunteers across all EU28 countries plus Iceland and Norway. Selected
consumers will be sent a small device to plug into their home Internet
connection. This device will run a series of automated tests when the line is
not in use. It will establish the speed and performance of their broadband
connection.
Background on the four studies.
-
BIAC study
The
European Commission is publishing a 2013 comparative
study on Broadband Internet Access Costs (BIAC) that was conducted in all
EU Member States, as well as in Canada, Iceland, Japan, South Korea,
Liechtenstein, FYRoM, Norway, California, Colorado, New York State, Switzerland
and Turkey. It is based mainly on information collected in the period between
February 1st and 15th, 2013. The study analysed the offers of ISPs. Where
appropriate, the information for this period has been compared with similar
information that was previously collected in February 2011 and February
2012.
-
@SamKnows study
This study made by @SamKnows for the European Commission
measures the difference between the Internet speed you pay for and the internet
speed you get. The results are based on peak time performance, which is defined
as weekdays 7:00pm to 11:00pm (inclusive). This is the second @SamKnows study (with a third study
planned in 2014).
It
is based on a methodology that uses hardware devices and provides the most
accurate and independent results of Internet performance regardless of access
technology and home installation. This methodology has also been used by
national regulators in the US, the UK, Brazil and Singapore.
9,467 devices spread across 30 countries took a total of
7,184,604,603 measurements as part of 63,666,843 unique tests.
The
second report was completed independently of Internet Service Providers (ISPs),
however ISPs are invited to participate in third report.
-
Eurobarometer Survey
The
Eurobarometer survey measures user perceptions of telecoms services in all EU
member states in February 2014.
-
COCOM Report
The
Commission is publishing data on the number of broadband subscriptions in
Member States gathered in the context of the Communications Committee (COCOM).
The report
relies on data collected from relevant ministries and regulatory authorities
and other broadband-related statistics published by the Commission (data on
coverage, retail and wholesale prices and the broadband state aid
cases).
Useful links
BIAC study
Link to SamKnows
study
Eurobarometer
telecoms household survey
Broadband access
in the EU - July 2013
Connected Continent: a single telecom market for growth
& jobs website
Annex: Actual download speeds compared to those
advertised in the USA and Europe