Service providers may be hot on the trail of delivering 1 Gbps fiber-to-the-premises (FTTP) services, but today's reality is that most consumers will not consume nearly that amount of bandwidth, nor are they universally aware that such services exist.
According to a joint study conducted by Pivot Group and Telecompetitor called GigaWhat? U.S. Broadband Awareness, Needs and Perceptions Study, 87 percent of 800 survey respondents said they had not heard of Gigabit broadband services before taking part in the survey.
While service providers have emphasized the idea that 1 Gbps services offer dramatic speed improvements, only one-third (32 percent) of Internet users know the speed of their current connection and roughly three-quarters (74 percent) indicate their current Internet speed meets their needs or is faster than what they need.
"Service providers spend an awful lot of time and marketing spend emphasizing speed, but this research reveals consumers are confused regarding speed references and perceive that their current speed package is sufficient," says Dave Nieuwstraten, president of Pivot Group and co-author of the study. "The introduction of Gigabit services into a given market will require significant customer education and effective marketing techniques to help achieve adoption success."
One issue that all service providers, including established incumbent telcos such as AT&T (NYSE: T) and Cincinnati Bell, will have to educate their user base about is the definition of the new speeds.
The study revealed that nearly half (54 percent) of survey respondents did not know a gigabit was faster than a megabit. While Google Fiber (NASDAQ: GOOG) has set the competitive pricing threshold at $70, nearly 70 percent of respondents indicated that price is too high. However, two-thirds (64 percent) of respondents would prefer to pay slightly less per month for their current speed than pay slightly more for a faster connection.
Despite the emergence of new players like Google Fiber, the research indicates consumers may favor more traditional Internet service providers like AT&T for Gigabit services.
- see the release
Special report: Gigabit Wars: The best prices for 1 Gbps service from ILECs, MSOs and municipal providers
Sprint MVNO Ting sets foundation to deliver 1 Gbps FTTH service
3 Mbps home broadband speeds can't support consumers' content appetite, says report
Oregon tax law could trip up Google Fiber's Portland rollout
Cincinnati Bell's Fox: Our 1 Gbps service is about driving importance of broadband speeds