Anyone in the telco industry knows the value of a high-speed broadband connection, but that knowledge is going mainstream. According to a recent study, the North American home seeker not only understands the value of high-speed Internet, they are willing to pay for it. This represents a huge opportunity for network providers to work with building owners and operators to install high-speed Internet and market its availability to potential buyers and renters.
The study released by the FTTH (Fiber to the Home) Council Americas found that fiber optic network availability increases rental values by 8% and property purchase values by 2.8% in multiple dwelling units (MDUs). In fact, high-speed Internet is the single most important amenity for MDU residents, more important than 24-hour security, a balcony, a washer-dryer or cable TV.
Who is willing to pay more for broadband?
The study involved a random sample of 2000 Canadian and American MDU residents. MDU residents use more broadband than residents of single family dwellings. MDU residents are, on average, younger than the typical single family dwelling resident. They are less likely to have children at home, and they are more likely to use streaming services.
How Do We Know They are Willing to Pay More?
When asked to choose between identical properties of equal value, with only one offering high-speed broadband Internet, the majority of respondents indicated that they would choose the option with high-speed internet.
Respondents were also asked what kind of discount they would require to buy or rent a property that had no high-speed Internet. This was based on a condominium with a $300,000.00 purchase price or a $1000.00 monthly rental price. Buyers required an average discount of $8,628 and renters required an average discount of $80/month.
What About the Variation in Property Types?
According to the study, respondents who live in luxury and high-rise buildings are more likely to value high-speed broadband. Residents in newer buildings are also more likely to rate high-speed Internet as “very important.”
Fiber and the Feel-Good Factor
Respondents with FTTH networks reported faster speeds, greater satisfaction with their housing and Internet service and more likely to recommend their services to others.
This means fiber improves renter satisfaction, which reduces churn in rental properties. Churn is the rate at which customers leave. For the MDU, a reduction in churn means that tenants are not moving out frequently. This saves the building operator time and money.
For purchase properties, this feel-good factor improves the likelihood of word-of-mouth promotion, which has a positive impact on the final sale price.
The study found that broadband availability is only marketed to house seekers about one-third of the time, even in cases where the property features FTTH broadband.
Does this mean building owners and operators are missing an opportunity for increased revenue? The numbers are not available on this yet, but the evidence certainly suggests it may be the case.
Home seekers are clearly including Internet availability and quality in their selection process. Make their housing decisions easy by installing a FTTH network and ensuring that they know that the best network possible is available to them.
The aesthetics of the network needs to add value too, or at the very least the network setup should not detract from a building’s value. For MDUs, consider using one of these outside plant fiber enclosures for your next installation.