Have you been enjoying reasonably-priced home internet prices? Well, you might want to keep up with some news because those prices may see an increase. US companies, led by Comcast, are all set to start increasing prices on broadband internet services. You can expect to see your current rate to double in the near future.
This seems to be the conclusion from New Street Research and analyst Jonathan Chaplin, who released a new report. This report shows good news and promise for the cable industry, but is bad for everyone else who doesn’t want to pay big money to heir local monopolists.
“We have argued that broadband is underpriced, given that pricing has barely increased over the past decade while broadband utility has exploded,” New Street’s report said. “Our analysis suggested a ‘utility-adjusted’ average revenue per user (ARPU) target of ~$90. Comcast recently increased standalone broadband to $90 (including modem), paving the way for faster ARPU growth as the mix shifts in favor of broadband-only households. Charter will likely follow, once they are through the integration of Time Warner Cable.”
New Street also notes that those increases could be as much as doubling your current rate. So if you’re paying $50 per month for your internet connection, it may increase to as much as $100 a month for the same service and no extra additions.
Why are rates going to increase so much? Well, it has to do with the declining cable business. As cord-cutters continue to ditch cable, cable companies will be looking for ways to make up for the different. They will start looking at broadband prices as more revenue generators. As people opt for internet-only packages where they can stream the likes of Netflix and Hulu, cable companies are going to take advantage of broadband internet usage and skyrocket prices. Cable companies cite price increases by saying that it’s to help with cost of new investments in their network, which to a certain extent is true, but more often it’s to increase profit margins.