Broadband costs should fall, but will rise again
WHILE wholesale broadband costs could drop by 11% by next year, they could well be 17% higher by 2028, the Guernsey Competition Regularity Authority has admitted.
Under its price control proposal for wholesale broadband, expected to come in next year, prices would drop, but a 3.4% annual increase has been allowed for over the five-year period.
The regulator said this was based on efficient costs and investment demands for a next generation broadband technology.
Guernsey’s last regulatory price control decision for wholesale broadband was published in 2006 and resulted in a 15% fall in wholesale broadband prices.
Now its latest recommendations are suggesting a 11% drop, taking the proposed price cap for a monthly broadband subscription to £22.62 a month for 2024. But the proposal allows for this to rise to £26.48 a month by 2028.
‘For things like broadband, we are at this critical point now with the transition to fibre and that’s a big part of what sparked a review of this scale, and it’s not one we expect to happen often,’ said GCRA chief executive Michael Byrne.
‘With the intervention, we can be confident that those prices are fair, because we will review the costs and we have efficiency measures in there, making sure there is no excessive profiteering in those price levels.
‘Of course you expect costs to increase because of inflation and so companies have to take that into account when they set prices.’
Compared against 29 other European jurisdictions, it was found that Guernsey was fifth most expensive, and four places higher on the list than Jersey.
But Mr Byrne said that it was difficult to make the comparison, especially with other countries using different telecoms systems.
‘We will wait until we finalise a decision and then we will make the comparison of where Guernsey stands compared to others.
‘Prices move in different countries over time, so when we are in position of where we think the right level is, then we will actually benchmark ourselves compared to other countries which will give us a better idea.’
The review would create competition between companies, which encouraged innovation, better quality and service, he added.
