Broadband Adoption Accelerates

According to the TIA, the U.S. broadband market is expected to reach an estimated 56.9 million subscribers by 2008, growing from 32.5 million subscribers in 2004. For details, check out the TIA’s 2005 Telecommunications Market Review and Forecast, an annual study of the Telecommunications Industry Association (TIA). The broadband market has grown substantially since 2001, when there were only 5.1 million subscribers.

According to the survey, in 2004, the number of high-speed subscribers in the United States grew by 35.4 percent to reach 32.5 million subscribers, consisting of the following access technologies: cable modem (17.0 million), DSL (12.6 million), fixed wireless (2.2 million), fiber-to-the-home (0.2 million), satellite (0.4 million), mobile wireless (3G) (0.1 million) and broadband over power line (less than 50,000).

Comparison Between Cable and DSL Broadband Access

Faster speeds are driving demand for cable modem and digital subscriber line (DSL) providers. With telephone companies becoming more aggressive in rolling out bundled DSL services and cable operators losing subscribers to direct broadcast satellite, the gap between cable and DSL narrowed in 2004 and will continue to decrease through 2008. In 2005, for example, DSL is expected to experience a greater percent growth (19.8 percent) than cable modems (17.1 percent). Despite DSL gains to 12.6 million subscribers, however, cable modems remained the dominant broadband technology in 2004, with 17 million subscribers.

Broadband Market To Reach 56.9 Million Subscribers By 2008

Even with fewer subscribers, DSL leads in service revenue and will grow at a 14.3 percent compound annual rate to $13.6 billion in 2008 from $8 billion in 2004. This growth will be fueled by a 14.6 percent compound annual growth rate (CAGR) in DSL subscribership, from 12.6 million in 2004 to 21.7 million in 2008.  Cable modem service revenue, on the other hand, will expand at a 6.1 percent CAGR from $8.6 billion in 2004 to $10.9 billion in 2008.

Some thoughts after reading this report. Cable companies will always have free ads on their networks so how will DSL compete with free ads? Will WiMAX or BPL or broadband over power lines make a more noticeable dent in such surveys in the future? BTW, who is using BPL? If you are, please respond to this entry as I would like to write about your experiences.

  • Roy
    April 10, 2005 at 5:27 pm

    The cable vs. dsl is an interesting race to follow. I’m still trying to understand how dsl’s penetration rate as such a momentum compared to cable. Is it mainly price that causing this? Is the consumer’s experience better with the telcos over the cable companies?
    I understand the idea that cable has more advertising power but with that dsl is still growing faster so it’s obviously not really helping too much.
    My personal opinion is the price per bandwidth. dsl offers more bandwidth for a lower price and cable is slowly increasing their bandwidth but are not budging on their price.
    just my 2cents

  • Rich Tehrani
    April 10, 2005 at 5:36 pm

    Recently I installed a computer for a friend and the decision of cable modem Vs. DSL came up and the price difference was $10 or more a month as I recall. DSL was chosen because of price. Speed wasn’t an issue for my friend but price was. And by the way he is pretty wealthy. The cable companies have a superior product now and unlimited advertising. They don’t need to cut price to gain share. I do know other people that switched from DSL to cable btw. If cable companies did cut price by $10 or more a month DSL would be in real trouble.

  • Roy
    April 11, 2005 at 3:44 pm

    Cable operators will wait to drop their price until the last second, in the mean while they are adding more services to justify the price to the customer but the competition is doing the same thing so I think the cable MSOs will have to drop their price if they want to change the churn rate of their customers.
    Do you believe that if the cable operators were to add services to their standard high speed data service such as streaming content via the portal, a personal communication client (IM,voice, video), etc. will really persuade the customer to pay the extra $10? I have a hard time believing that especially when the competition can provide the same added service for a lower price.

  • Rich Tehrani
    April 11, 2005 at 4:20 pm

    Cable bandwidth is much greater than DSL so I believe for the time being they will be able to get away with charging more. As I mentioned in my previous comments, some people wont pay for the extra speed but others will. If you subscribe to the philosophy that you can never have too much bandwidth then you see the cable companies as winners. Frankly, with streaming radio coming and other streaming services, even cable companies will have to increase bandwidth to keep up with future demands.

  • Sam Spencer
    May 4, 2005 at 11:24 am

    Hi Rich: You asked for feedback from those using BPL. I wish I had access to it but I’m reasonably happy with cable today and Verizon has just buried some fiber in my front yard and the tech told me they plan to deliver 15 mbps. I’m editor and founder of the BPL industry’s only trade newsletter, BPL Today, so please feel free to contact me if you have any specific questions I might be able to answer.

  • Nathan
    June 7, 2007 at 6:34 pm

    I personally like cable technology. I don’t know why, but so many areas around where I live are not able to host DSL connections. I guess it is going to be cable for me.

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