Consumer broadband remains a fundamental driving force in the fixed services bundle, acting as both the anchor product and the pipe that supports an increasing number of other digital services. Over the next five years the segment will continue to drive revenue growth for the telco industry with a CAGR of 3% – largely pushed by a continual, albeit gradually slowing, growth in subscriptions.
Over the same period subscription average revenue per user growth will be minimal but download speeds will continue to grow at an exponential rate, pushed to some extent by the increasing demands of high-bandwidth applications but also due to simple market-competition pressures. By 2024 all tariffs with speeds of less than 100Mbps will be in decline and average download speeds in leading countries will be in excess of 400Mbps. On a subscription basis the global average speed will be in excess of 250Mbps, although this is heavily weighted by China which will have tens of millions of gigabit subscribers. At a country level however, the average will still be 147Mbps with 60% of the countries forecasted by Ovum having an average speed of more than 100Mbps.
Figure 1: Over 60% of broadband tariffs will be 100Mbps+ by 2024
Source: Ovum's Consumer Broadband Subscription and Revenue Forecasts: 2019–24
If they are to remain competitive, broadband providers need to prepare for this accelerating drive for greater speed by continuing to invest in new access technologies. However, at the same time, unless they are operating in ultra-developed and competitive markets, there is no rush to move to gigabit services just yet as, in general, consumers are more focused on overall quality than speed alone. Reliability, low-latency, and a high level of customer service are just as important as speed to most consumers. Service providers should focus on optimizing all areas.
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