US broadband service providers attracted 1.3 million new subscribers during the second quarter of 2002, according to a new study from Jupiter Media. Approximately 13.1 million households or 21% of all online households now connect to the internet using a high speed connection.
In the report,
Broadband User Segmentation: Understanding and Targeting the Broadband Audience, it is claimed that there will be 15.4 million broadband subscribers in the US by the end of the year. However, there are signs that growth is slowing as consumers become more discerning.
“While many providers offer discounts on the first three to six months of service, this may not overcome consumer sticker shock,” said broadband analyst, Joe Laszlo. “Consumer DSL offerings grew by 10 percent in the second quarter of 2002, while the cable modem audience grew by 12 percent from a much larger subscriber base. Higher average prices for DSL than for cable largely explain this difference.”
The OTP recently lamented the high cost of broadband in the US (see Broadband Too Expensive In The US, Says Report) and Laszlo warns that service providers will have to change their marketing strategy and target different audience segments in order to lure new users.
“Cresting 20 percent of the online audience creates another worry for broadband service providers,” commented Laszlo. “Most classic early adopters have broadband at this point, and new strategies and messages will likely be required to entice increasingly mainstream dial-up users to broadband.”
With churn rates set to increase, the report also suggests that ISPs face a battle to hold onto existing subscribers. Until now the benefits of speed and avoiding a second phone line have been the primary drivers behind broadband growth. However, it is emphasised that providers will have to become more flexible in their marketing if they are to simultaneously boost broadband uptake and limit churn.
The Leichtman Research Group has estimated that more than 37 million US homes will have broadband internet access by 2007, equivalent to half of the online population (see Broadband In Half Of Online Homes By 2007, Says Leichtman).
