Big Boosts in Broadband

Nielsen//NetRatings reveals that the largest broadband markets achieved significant audience gains of at least 48 percent year-over-year in their respective high-speed populations this past April.

Overall, more than 25.2 million surfers at-home accessed the Internet via cable modem, DSL, ISDN or LAN last month as compared to 15.9 million individuals in April 2001, increasing 58 percent year-over-year.

“Sixty-five percent of the top broadband metropolitan areas posted robust growth in their high speed populations, signaling that, while some barriers exist to broadband expansion such as increasing costs, there is healthy room for additional growth and adoption of broadband,” said TS Kelly, director and principal analyst, NetRatings. “The largest broadband cities continue to grow.”


Top 20 Broadband Cities, April 2002
Local Market Unique Audience
(000)
Year-Over-Year
Percent Growth
1. New York* 2,780 70.5%
2. Los Angeles* 1,766 87.9%
3. Boston* 1,120 48.4%
4. San Francisco 1,110 21.0%
5. Philadelphia* 785 69.9%
6. Seattle 691 22.3%
7. Dallas 623 12.8%
8. Chicago 555 13.9%
9. Washington DC* 532 153.2%
10. Atlanta* 517 87.7%
11. San Diego 497 15.0%
12. Sacramento* 416 117.8%
13. Detroit 411 8.0%
14. Orlando* 401 183.0%
15. Minneapolis* 368 94.3%
16. Tampa 368 45.0%
17. Hartford* 366 198.3%
18. Portland* 366 105.1%
19. Phoenix* 320 67.6%
20. Baltimore* 310 174.4%
Source: Nielsen//NetRatings, April 2002
*Denotes local market is among the top 20 fastest growing broadband markets.



Moving from home broadband to professional usage, research from
In-Stat/MDR shows that small business users account for nearly 34 percent of business broadband subscribers (DSL and cable), with expectations of increasing to nearly 40 percent by 2006.

Though the research shows that there are roughly twice as many cable modems as there are DSL lines in use by small businesses, the price disparity between these two classes of service is quite dramatic. In-Stat/MDR estimates that small businesses spent just over $331 million on cable modem services in 2001, a bit more than one-third of estimated DSL expenditures of nearly $1 billion. By the end of this year, these small firms are expected to invest roughly $800 million on cable modem services, showing significant growth, but this pales in comparison to expected expenditures of more than $1.5 billion on DSL at that time.

In-Stat/MDR believes that the price difference can be attributed to the fact that cable modems are found in the home, where they do not command much of a price premium, even for business users in this (or any other) market. DSL, in contrast, is most likely to be deployed in commercial locations in this and other markets, where monthly price premiums can reach over $100.

Leichtman Research Group, Inc. takes a look at the overall high-speed picture, documenting an increase of 6.6 million to nearly 12 million in U.S. broadband subscriptions, with nearly identical growth in cable and DSL connections.

“Five million new subscribers in a year is a major accomplishment for the broadband industry as a whole,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc. “The challenges ahead for both cable and DSL providers are to find ways to continue to grow the subscriber base, and to add new services for existing customers.”

The research firm sees year-to-year subscriber growth for cable at 78 percent, and DSL increasing by 79 percent. However, because the top cable providers began with a larger customer base, cable added almost twice as many subscribers as the major residential DSL providers. In the past year, the top cable companies added over 3.4 million broadband Internet subscribers compared to nearly 1.8 million broadband subscribers added by the four major DSL providers over the same time period.


Broadband Growth in the U.S., Q1 2002
High Speed Subscribers 1 Year Ago Net Adds
Cable Modem
Time Warner 2,195,000 1,183,000 1,012,000
AT&T 1,625,000 1,134,000 491,000
Comcast 1,040,500 574,300 466,200
Cox 1,001,311 587,170 414,141
Charter 747,700 324,600 423,100
Cablevision 559,765 303,800 255,965
Adelphia 377,500 150,906 226,594
Mediacom 112,300 79,800 32,500
Insight 88,100 30,300 57,800
Cable One 32,900 3,600 29,300
Total Top Cable 7,780,076 4,371,476 3,408,600
DSL
SBC 1,500,000 945,000 555,000
Verizon 1,350,000 720,000 630,000
Bell South 729,000 303,000 426,000
Qwest 484,000 306,000 178,000
Total Top DSL 4,063,000 2,274,000 1,789,000
Total Broadband 11,843,076 6,645,476 5,197,600
Source: The Companies and Leichtman Research Group, Inc.
All data from Q1 2002, except Adelphia, Mediacom, Insight, Cable One from Q4 2001


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