Operators sold subscribers on usage-based broadband, now must keep up with that usage

In the first quarter of 2023 subscribers on usage-based broadband (UBB) plans for the first time reached and marginally surpassed consumption parity with flat-rate broadband (FRB) plan consumers, according to an OpenVault Broadband Insights (OVBI) report. Operators have long pushed for this to happen, but now they must face the network health and congestion challenges that come hand-in-hand with UBB consumption growth. The OVBI report said that significantly higher rates of usage growth among UBB subscribers resulted in average (562.7 GB) and median (382.0 GB) monthly consumption — slightly higher than the 555.5 GB average and the 371.1 GB median for consumers on FRB plans. The report noted UBB operators are seeing significant average revenue per user (ARPU) growth compared to their FBB counterparts. But OpenVault attributed this to a higher take rate on the faster speeds consumers are self-selecting in usage-based billing scenarios — not because operators are inundating subscribers with overage fees as some might assume. While ARPU is higher for UBB, the implications of higher UBB consumption for the broadband industry are still “mixed,” the OVBI report said. This means that operators who have incentivized UBB as a tool to reduce strain on the broadband plant and differentiate from their competitors now have to face the consequences of their successful campaign and figure out how to keep up with snowballing network traffic.