Historical price data gives broadband service providers valuable information about industry trends and customer expectations. A new study from USTelecom provides data insights about pricing for internet service, finding that while consumers increasingly choose faster broadband speeds, prices for those speeds continue to decline. In fact, prices for the most popular broadband service chosen by consumers declined 9.4% over the past year.
The trend of more providers entering the gigabit market and fiber becoming more widely available is pushing broadband’s value upward to consumers, the study found.
“Thanks to the world-leading pace of broadband infrastructure investment by the U.S. private sector and an intensive focus on fiber deployments, consumers have never had a stronger value proposition for their connectivity dollar,” said the fifth edition of USTelecom’s Broadband Pricing Index (BPI).
The study provided data on broadband pricing in two categories: BPI-Speed and BPI-Gigabit.
The BPI-Speed Index analyzes pricing trends for those services selected by a majority of U.S. consumers. In this category, the study found that 55.4% of consumers have purchased service between 100 Mbps and 940 Mbps as of December 2023.
This index compares real prices over two different time intervals: year over year, and from baseline year 2015 to 2024.
- The study identified a 9.4% price decrease, adjusted for inflation, in providers’ most popular services between 100 Mbps and 940 Mbps, from 2023 to 2024.
- Even more strikingly, real prices for these BPI-Speed offerings declined 59.9% from 2015 to 2024.
The broadband price study’s new BPI-Gigabit Index analyzes pricing trends among providers’ faster speed offerings; in 2024, this encompassed services ranging from 940 Mbps to 1 Gbps. Approximately one-fourth (25.1%) of U.S. consumers purchased service in this category of 940 Mbps to 1 Gbps, as of December 2023.
The BPI-Gigabit index offers data insights about how broadband prices have evolved over the past seven years. The baseline year of 2017 was chosen because it is the first year that some peer providers registered gigabit plans in the FCC’s Urban Rate Survey. In 2017, 12 offerings met the BPI criteria for this category; by 2024, there were 923 offerings.
- The price of providers’ BPI-Gigabit service offerings declined 3.9% from 2023 to 2024.
- In a long-term comparison, prices are 43% lower in 2024 than they were in 2017.
Against the backdrop of inflation, the study’s data exhibit a sharp contrast. From 2015 to 2024, the cost of consumer goods and services soared 32.2% while BPI-Speed prices for services between 100 Mbps and 940 Mbps declined by 41%. From 2017 to 2024, in the gigabit broadband price category, the overall cost of consumer goods and services increased 27.5%, while BPI Gigabit prices dropped 21.4%.
“An intensely competitive broadband marketplace is delivering big-time for American consumers and our innovation economy,” said USTelecom President and CEO Jonathan Spalter. “This competition and broadband companies’ investment in modern infrastructure is driving powerful efficiencies and lower prices with benefits that extend from the global reach of U.S. competitiveness to the hyper-local reality of household budgets.”
The broadband price study also offers data on the faster speeds that make up the other half of broadband’s value proposition. Upload and download speeds have dramatically accelerated since 2015. In the most popular broadband service offerings between 100 Mbps and 940 Mbps, download speeds have increased 113.5%, and upload speeds have increased 88.5%.
The BPI study calculated that lower prices and faster speeds combined to deliver an 81.2% reduction in the cost per megabit of broadband connectivity over the past nine years — lowering it from $0.87 to $0.16.
