Ecommerce Dreaming

Users in the US are signing up for broadband internet access in greater numbers than ever before (Broadband net users boom, BBC News, 15 November 2003). But analysts are now warning that this level of growth is unsustainable as there is now little room left to cut prices.

Sigh. If only that were true in Bermuda. Elsewhere in the world broadband costs may be hovering around the $40/month mark for a 512kbps connection, but here in Bermuda the same thing will cost you $358/month for unlimited access. The slowest connection you can choose - 128kbps - is still $178/month. The best that can be said for this is that it actually seems quite good value when compared with the cost of dial-up (around $82/month for 50 hours or $120/month for 75 hours).

Of the $358 for the 512kbps connection, the telephone company, BTC, accounts for $109 while the remaining $249 is levied by the ISP. BTC has a monopoly and while there are two ISPs for residential customers to choose from, Northrock and Logic, their prices are identical.

Logic have recently been offering sweeteners to try to encourage people to sign up, but they've been pretty unimpressive. Their first offer was of broadband for $1/month - for the first month. More recently they've been offering new subscribers a free modem (worth around $150).

There is, I think, general recognition that broadband prices are too high, and the government recently produced an e-business green paper which acknowledged these issues (p45). But the green paper’s recommendations were tepid – a suggestion that BTC and the ISPs should offer bundled services and that other methods (such as cable) be considered for delivery of broadband.

It’s time the government stepped in more forcefully. In the short term, regulation and/or subsidies could lower the prices levied by both BTC and the ISPs, while in the longer term government should look for ways to introduce more competition to the market.

While internet access remains 10 times more expensive than the US, Bermuda's dreams of becoming an "ecommerce hub" will remain just that.

Comments

[GS on 17.11.03 at 14:52]

It's a little off topic, but have a look at this story:

http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1068548844766&call_pageid=1068644932949&col=1068644932965

[Kevin Anderson on 16.01.06 at 15:21]

Please allow me to update the information on DSL rates in Bermuda that is appearing in your latest newsletter. Clearly this is outdated information from a 2003 Blog and not from an official source.
DSL rates : up/down (monthly cost)
128k-150/512k - $29.95 unlimited
256k-300/512k $69.95 "
512k-600/600k $99.95 "
The telephone company charge for DSL is $59 p/m
Dialup rates begin at $19.95monthly unlimited.
Due to competition similar rates are available from all local providers.

[Phil on 16.01.06 at 18:35]

Kevin

The information in this post was correct at the time of posting (November 2003) and taken from the ISPs and BTC's own website.

Obviously prices have come down since then, but the price of DSL in Bermuda remains much higher and reliability much poorer than elsewhere in the world.

As it happens, I have been without an internet connection at home for most of this last weekend because of what appears to be a BTC problem. I'm still not even sure it's been fixed now (Monday evening).

[Ethiops on 16.01.06 at 21:45]

Those prices would be the fuel for a revolution probably anywhere else in the modern world. $70.00 for 512-600k omg. That is pathetic. I feel for you lot no wonder so many of my friends ain't ever online when I am.

[Combat Banker on 17.01.06 at 07:39]

Hey Limey, since when were you a Newsletter?