xDSL to Become Broadband of Choice

The worldwide shipment of digital subscriber lines (xDSL) is expected to grow from 350,000 units in 1998 to 9.8 million units in 2003, according to Gartner Group’s Dataquest unit.

According to Dataquest, healthy market growth is expected for xDSL in all regions, with the US leading the way. DSL growth in the US will be fueled by 50 percent PC penetration in the country, with 36 percent of those PCs wired to the Internet at the end of 1998.

“DSL technologies have barely started to tap the total available market for broadband Internet access,” said Kathie Hackler, principal analyst for Dataquest’s Remote LAN and Internet Access Worldwide program. “In this early stage of the market, xDSL is mainly being developed as a business tool for telecommuters and SOHOs, while cable modems have been more targeted for consumer/residential applications. With the market momentum that both technologies are gaining, it appears, for at least the next five years, that both will be market winners.”

Worldwide xDSL Equipment and Cable Modem Shipment Forecast
(thousands of units)
1999 2000 2001 2002 2003
xDSL CPE units 1,032.6 2,322.1 3,952.8 6,383.3 9,835.9
xDSL central office (CO) ports 1,261.9 2,502.6 4,000.9 5,391.4 6,873.0
Cable modem units 1,757.9 2,765.8 3,746.8 4,488.7 5,326.5
Source: Dataquest

According to Dataquest, two main factors will drive xDSL market growth: a growing need to access information on the Internet and remote intranets, and an increasing tendency to use the Internet not only for email, but also for more bandwidth demanding tasks such as research and education and news and information access.

Another factor spurring the growth of xDSL is the telecommunications providers’ need to compete with cable modems, which currently lead xDSL in number of shipments. In 1998, 2.4 cable modems were shipped per every xDSL customer-premise equipment (CPE) device.

“As broadband Internet service providers expand the footprint of their service offerings into more major metropolitan and second and third-tier markets over the next five years, the outlook for cable modem shipments is for vigorous growth in North America,” said Dataquest analyst Patti Reali.

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