DSL is closing fast

August 24, 2005

Look out U.S. cable operators; when it comes to broadband market share, those telcos are getting awfully big in your rearview mirror.

Indeed, according to a research report from Pike & Fischer's Communications Media Analysis Group (CMA), cable operators now command just 55 percent of the high-speed Internet market, which represents the lowest market share the industry has ever held.

(High-speed Internet was measured as anything over 200 kbps downstream.)

Both cable companies and telcos added an aggregate of 1.7 new broadband subscribers in the second quarter of 2005. Cable companies, however, just barely bested the telcos in terms of new subscribers, 858,600 to 856,000.

In terms of raw numbers, cable operators have about 28 million subscribers compared with the 17 million telco DSL customers.

CMA's Scott Sleek told TMCnet in an interview today that the next couple of quarters will determine if the cable companies' market share drop is a major trend.

"DSL has been nibbling away at cable for the last few quarters," Sleek said. "It's been pretty steady."

"The second quarter is typically slow because students close out their accounts and so forth," Sleek added. "But this was a particularly slow second quarter. It raises the question whether the market is saturated from cable and [if] DSL will continue to grab more subscribers."

The report, which was based on the figures reported by large to mid-sized broadband providers, also revealed the following:

• In general, the broadband industry continues to grow, with a total of 39.7 million households having high-speed Internet service as compared to 27.2 million recorded during the second quarter of 2004.

• Approximately 34 percent of American households have broadband service.

Even with the growth of broadband subscribers, Sleek said that he was not optimistic about achieving President Bush's declaration that everyone in the country has broadband access by 2007.

"There are still affordability and regulatory issues in the way," Sleek said, adding that municipal broadband would help achieve that goal.