While there has been justifiable excitement at the growth of broadband internet access, dial connections are far from dead and service providers will need to maintain support for their narrowband customers, says IDC.
In its latest study,
Western Europe Consumer ISP Forecast, 2002-2007, the research group predicts that the number of consumer broadband connections in Western Europe will grow from 18.7 million at the end of 2003 to almost 50 million by the end of 2007. Over the same period, the number of dial connections will fall by 9% from 52.5 million to 34.2 million. Four European countries (Germany, France, UK, Italy) already appear in a list of the world’s top ten broadband powers (see
Broadband Reaches 100 Million Lines).
It is clear that most of the future growth in consumer internet access will be based on the uptake of broadband services. Internet households continue to migrate to high-speed and many new customers are bypassing dial-up and moving straight to broadband. However, even though growth is on the decline, dial ISPs continue to attract new business and not every customer is prepared to pay the extra cost for a broadband service.
Chris Drake, a senior analyst with IDC’s European IP Services research service, commented: “Although dial usage will decrease, the contraction of the dial market will be slower than the overall increase in consumer broadband services.”
Narrowband lives on An IDC analysis of the consumer ISP market in 2003 has shown that in some markets narrowband services continue to grow. Recent months have even seen the introduction of new flat-rate dial offerings and wholesale FRIACO (flat rate internet access call origination) products.
Some ISPs, notably Tiscali and AOL, have a consumer base that is predominantly (90%+) made up of dial-up subscribers and can therefore not afford to neglect the slow lane.
“As providers of both dial and broadband services seek to migrate their dial customers to broadband they must ensure that they continue to support the needs of dial customers,” said Drake. “Some providers are already discovering that disillusionment with their dial service can lead to churn, with dial customers moving to the broadband (or dial) offerings of rival ISPs.”
While there may be financial benefits in encouraging broadband uptake, service providers have a responsibility to ensure that a wide range of dial access facilities and pricing plans are available and that new value-added services and online content is not reserved exclusively for high-speed internet customers.
The growth of broadband and a relatively slow decline in dial services will contribute to rising levels of internet penetration in Western European countries. The proportion of online households in the region is forecast to increase from 44% to 52% between 2003 and 2007. Penetration is set to grow from 36% to 46% in France, from 47% to 53% in Germany and from 56% to 64% in the UK.
