Broadband Market Still Poised for Growth
Broadband now services 60 percent of U.S. online households with signs of continued growth.
Broadband now services 60 percent of U.S. online households with signs of continued growth.
Despite talk of a slowdown in broadband adoption in 2005, high-speed Internet access reaches 60 percent of U.S. households. According to “Broadband Access and Services in the Home 2006,” a report released by Leichtman Research Group, the market can expect continued growth.
Forty percent of current narrowband, or dial-up, subscribers say they want to upgrade to a broadband account. Barriers to adoption, such as cost and availability in rural areas, no longer keep narrowband users from upgrading to high-speed.
“The number of broadband subscribers in America will nearly double [in the next five years], so there’s a huge opportunity,” said Bruce Leichtman, president and principal analyst for the Leichtman Research Group. “With lower entry prices, particularly with DSL, the migration from dial-up is much quicker than many expected.”
Cable holds a lead in the number of subscribers. An earlier report released by Leichtman said cable operators supplied 25.8 million broadband subscribers, and DSL serviced 20.2 million out of 46 million high-speed Internet subscriber accounts. The 46 million subscribers account for 94 percent of the market.
Cable subscribers tend to be in households with higher incomes, according to the report. Thirty-seven percent of households with annual incomes over $75,000 subscribe to cable versus 27 percent of DSL subscribers. Of households earning $30,000 to $75,000, 21 percent subscribe to DSL, and 18 percent to cable.
“Income is the greatest predictor of broadband penetration, and cable does very well among the high-income groups,” said Leichtman. “Where DSL has performed very well in the past year is in the middle class where they have taken a market share lead over cable.”
Data are based on a telephone survey of 1,600 randomly selected households from throughout the U.S. Additional data are derived from provider-side research.
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