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Price-Cutting in the Broadband Market

After falling rapidly for two or three years, broadband prices levelled off in the first half of 2005, according to Point Topic�s latest Tariff Benchmarks analysis. This could be a sign of maturity in the broadband market, or it could be just a pause before another round of price cutting. Most operators would prefer to keep prices stable, but they may yet be forced to reduce them by intensifying competition.

Most of the 34 broadband operators surveyed, supplying both DSL and cable modem services, held the prices of their 'entry-level' services static in the first half of 2005.

A total of 17 out of the 18 operators surveyed for DSL, kept monthly rental prices the same for Q2 2005 as they were in Q4 2004. The cable operators were slightly more inclined to cut prices. Out of the 16 cable modem surveyed, ten kept monthly rentals the same as in Q4 2004 five lowered them and one even put through an increase.

The results show growing stability in DSL and cable prices in the last 12 months, after a period of rapid falls. This stability points towards a maturing broadband market, as the emphasis could moves towards adding further value to �entry-level� services through speed and features other than price.

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