The installed base of worldwide broadband subscribers will exceed 21 million by the end of 2001, and ultimately reach almost 84 million by the end of 2005, according to research from Cahners In-Stat Group.
The research found broadband’s phenomenal growth is a direct result of increasing reliance on the Internet as an information, communications, business and entertainment tool. At the same time, new bandwidth-intensive applications are being introduced that make the argument for broadband services very compelling.
Cable modems and DSL have the highest subscriber penetration rates, and In-Stat projects they will increase rapidly in the near future. Even though satellite broadband and fixed wireless access have shown promise, high equipment and operating costs will keep their penetration rates well behind cable modem and DSL access over the next several years.
As the rapid growth of broadband continues, anxious service providers are expanding current service areas and experimenting with new access technologies, the research found. They are also keeping a close watch on their competitors and trying to best position their technologies and service for the future. However, even with rapid subscriber growth, overall worldwide broadband Internet access remains limited. By the end of this year, only 11 percent of total U.S. households will subscribe to broadband services.
Other findings from In-Stat include:
- Total worldwide broadband service revenues will rise from $5.8 billion in 2000 to over $37 billion in 2005.
- From the end of 2000 until the end of 2002, total U.S. broadband subscribers will almost triple, rising from 6.8 million to over 19 million.
- North American cable modem subscribers will continue to outnumber DSL subscribers through 2004. However, by the end of 2002, total worldwide DSL subscribers will surpass total worldwide cable modem subscribers.
- Strong growth in Europe, parts of Asia and in the North American business sector will account for the lion’s share of new DSL subscribers.
Despite the predicted growth of broadband outside the United States, homes in North America are more than four times as likely to be surfing the Net with a high-speed connection in 2001 than in Europe, according to research from Strategy Analytics. Subscription to broadband Internet service in Europe will rise to only 3.3 percent of homes by the end of 2001, compared to 14.1 percent in North America.
The rapidly growing demand for broadband Internet services in the United States and Canada is being supported by higher PC usage and ownership. In addition, a stronger cable industry in North America is rapidly deploying cable modems, thereby encouraging the telco industry to respond by rolling out DSL services. In Europe, by contrast, the cable industry is relatively weak and has so far provided little competition to telcos.
The leading broadband market in Europe is Sweden, with 9.4 percent of homes connected to broadband this year, according to Strategy Analytics. In Britain, however, less than 1 percent of homes will have broadband this year. The willingness of incumbent operators to invest in broadband upgrading is the main reason for such national variations.
“Europe is falling rapidly behind North America in the race to deploy broadband Internet,” said David Mercer, vice president of consumer practice at Strategy Analytics. “The local loop unbundling issue has obscured the fact that broadband uptake must be encouraged initially at the telco/cable level.”
More than half (51 percent) of North American broadband subscribers will be using cable in 2005, compared to 40 percent with DSL and 9 percent using other technologies. In Europe, the shares will be cable (40 percent), DSL (51 percent) and other (9 percent).
A report from pan-European Internet research company, Van Dusseldorp & Partners and international media analysts Screen Digest found the current cable and DSL penetration among European households at 1.79 percent — up three times from 1999’s figure of 0.48 percent. The report predicts that by 2003, penetration will stand at over 21 percent — with more than 18 million subscribers — up more than 44 times than in 1999.
By 2002, most alternative European telecom operators should have begun to launch DSL in competition with the incumbents following the expected unbundling of the local loop, which allows access to telephone exchanges by other companies. The Van Dusseldorp report also anticipates that this period will see DSL overtake cable in most of the markets under consideration, capturing an estimated 70 percent of the 18.8 million cable and DSL subscribers by the year 2003.
Germany’s early adoption of DSL, partly due to lack of investments in the German cable infrastructure, means that it now leads the market in Europe. The report estimates that by the end of 2000,there were approximately 400,000 DSL subscribers and only 1,000 cable Internet subscribers, compared to the next largest market, France, which has 60,000 DSL and 122,000 cable Internet subscribers. Britain has only 30,000 DSL subscribers, putting it at No. 9 in the European DSL league table. Ireland and Portugal are the only European countries to have no DSL subscribers. The German market will have increased to 5 million DSL subscribers by 2003, while France, the Netherlands and Britain are predicted to have 1 million subscribers each. This will bring the total European market up to 18.8 million cable and DSL subscribers, 13.3 million of which will be DSL compared to 5.5 million cable.
|Household Penetration of Broadband|
|Note: Individual countries include Cable and DSL only
Total Europe and North America include all broadband technologies
Source: Strategy Analytics
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