The Relationship Among Broadband Speed, Prices and Demand Worldwide

Toward the end of 2011, the United Nations requested the help of industries and government to success in making accessible the broadband Internet to the world’s population by 2015.
Broadband is an Internet connection service always-on, and represents an economically significant and fast developing sector concerning the use of Internet.
The professor of electrical engineering and computer science at the McCormick School of Engineering, Fabian Bustamante said that “Over the past few years, a growing importance has been placed on broadband, and national plans have emerged to ensure coverage. […] Several governments and the United Nations consider it a basic human right—on the same level as access to education and water.”
Fabian Bustamante and Zachary Bischof, a PhD student, have tried to understand the way in which broadband services are used, how the market influences the use and what is the real bandwidth needed by people. This was an innovative study because even though narrowed research on the topic has been developed, non-before tried to analyse broadband services in the larger context.
The researchers analysed the data collected in 32 months from 53,000 local networks and end hosts in 160 countries, and organised a global survey of retail broadband plans, to study the relationship among broadband services, demand and pricing. In the first week of November, between the 5th and the 7th, the two researchers will present at the 2014 Internet Measurement Conference in Vancouver, British Columbia, their paper “Need, Want, Can Afford—Broadband Markets and the Behavior of Users”.
What emerged from the results is that, despite of the changes and the increasing capacities of Internet data transmission in the last five years, broadband users maintain a constant demand in the same bandwidth capacity class in the developed countries. This is due to the fact that when users need more bandwidth, they just switch for the higher service to fulfil the increased demand.
On the other hand, huge differences concern developing countries. In developing countries, broadband users maximise the network instead of upgrading services to avoid increasing costs. It is important to notice that the cost of broadband Internet service is much higher in developing countries than in developed ones. To make a practical example, in Botswana, South Africa, the broadband with a speed of 1 Mbps costs 150$(about £93.50) which is a huge price when compared to the 20$ (about £12.50) of the United States. This means that there is a certain number of the population that are forced to rely on slower services, with transmissions like 512 kilobits per second, and therefore need to maximise the use of the limited speed connection.
Bischof said “If service becomes faster, then behavior changes[…]. People start using the Internet even more with faster speeds but, for most people today, that usage appears to plateau when capacity reaches around 10 Mbps.”
Bustamante and Bischof believe that their study can be useful to make the policymakers trying to improve broadband accessibility aware of the importance of the users’ behaviour. They believed such as behaviour is essential to be taken in account to ensure targeted social and economic impact. Bustamante concluded saying that “there are people trying to make policy decisions about where to invest in broadband” and that “to guide this we need to understand broadband networks in their broader context.”
Source: Original article from Amanda Morris, (Oct, 2014), Study Shows Relationship Among Broadband Performance, Pricing, and Demand Worldwide
Written by: Pietro Paolo Frigenti