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.

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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.

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

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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.

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

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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.

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

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"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."�

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

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� 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.�

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� Approximately 34 percent of American households have broadband service.

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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.

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