TELECOM Digest OnLine - Sorted: Re: The Competitive Broadband Environment ...

Re: The Competitive Broadband Environment ...

Bob Goudreau (BobGoudreau@notchur.biz)
Thu, 2 Feb 2006 22:51:11 -0500

jmeissen@aracnet.com wrote:

> I notice that in the UK Bulldog Broadband offers 8Mb/s DSL for 20
> pounds per month...

> Here in the States, Verizon offers a max 3Mb/s service for $30 per
> month (after $20 per month for the first three months). And if you're
> lucky and you're in one of the areas where they're deploying FIOS, you
> can get 5Mb/s for $36 per month...

> For comparison purposes it's useful to note that while it's expensive
> for US dollars to buy UK products, the salaries and prices in UK
> currency for a UK citizen are roughly equivalent to US salaries and
> prices in US currency for US citizens.

Um, no, they are not remotely equivalent. Prices of certain items
perhaps are, but not salaries.

According to http://www.bls.gov/cew/state2002.txt, the average annual
salary nof a US worker in 2002 was $36,764, which works out to $3,064
per month. A $30/month broadband offering thus costs 0.97 percent of
the average salary. (The introductory rate of $20/month is 0.65
percent of salary.)

In the UK in the same year,
http://www.statistics.gov.uk/pdfdir/nes1002.pdf reports that the
average weekly salary was 371 pounds. That works out to a monthly
rate of 1,612 pounds, so the 20 pound/month broadband service consumes
1.24 percent of the average salary.

I.e., 20 pounds in the UK represents almost DOUBLE the salary share
that 20 dollars represents in the US. (Or at least it did in 2002,
which was the most recent year for which I could find stats for both
countries.)

Coincidentally, at current exchange rates, 20 pounds is worth almost
exactly $36, so at least the 20-pound Bulldog offering gets you more
bandwidth (8 Mb/s for 1.24 percent of monthly earnings) than does the
$36 Verizon FIOS offering (5 Mb/s for 1.17 percent of monthly
earnings).

Bob Goudreau

Cary, NC

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