Global broadband prices fell sharply in the first half of the year as cable operators moved to meet the challenge of lower prices from Digital Subscriber Line (DSL) services, according to a latest report.
Monthly rental fees for broadband cable services dropped 16% in the first six months of this year, while DSL fees were slashed by 13%, said UK researcher Point Topic.
"DSL has been getting more users and cable modem providers are trying to compete and get back share," said Haroon Butt, senior analyst at Point Topic.
Broadband cable service providers engaged in aggressive price cuts during the first half of the year to bring their fees closer in line with those of DSL services, which had been previously reduced to attract new subscribers, Butt said.
Cable operators surveyed said that the average monthly rental rate for entry-level cable modem services declined from $39.20 (£21.40) to $32.00 over the period, a reduction of $7.20, while DSL prices dropped by $2.50 to $29.50 in the first half of the year.
These figures reflected average global pricing at purchasing power parity (PPP) exchange rates, Point Topic said.
Only one provider, Yahoo Japan, increased its prices for DSL by 20%, Point Topic said. However, the researcher noted Yahoo Japan remains the cheapest DSL provider in the world at PPP rates.
Price cuts primarily occurred in Asia and North America but European operators have recently jumped on the price-slash bandwagon.
Butt indicated that cable modem operators have more than price cuts in their arsenal.
"It's not just about pricing - it's also about services," he said. "They have a triple play. They can offer cable, internet and voice."
It will be interesting to see how the cable modem and DSL providers square off at the end of the third-quarter, Butt said, as the war between them becomes increasingly focused on services.
Scarlet Pruitt writes for IDG News Service