Broadband internet connections have reach a 28% penetration of online households in the US, according to a new report from Dataquest, a division of Gartner. This compares with just 12% in the UK (see Insight Analysis: Broadband Britain – A Progress Report).
The Dataquest report covered a 28-month survey period, during which the rate of broadband internet use in the US almost tripled, reaching a 9% average monthly growth rate. Overall growth, comprising both broadband and dial-up connections, was just 1% over the period.
The survey says that neither the economic slowdown nor the relatively high prices of DSL, cable modem and other broadband access services have slowed adoption or demand.
In June 2002, cable modem and DSL together accounted for 88% of the household broadband access market in the US, up from 70% in 2000. The more costly and slower-speed ISDN platform that served nearly one-third of the broadband households in February 2000 is rapidly losing ground to the faster, less expensive services; ISDN now serves only 8% of the market.
“Over the past three years, a competitive battle between DSL and cable modem has developed, with cable companies clearly being more focused and aggressive in the early stages of this race,” said Amanda Sabia, analyst for Gartner Dataquest’s worldwide Telecommunications and Networking group.
“While cable modem continues to dominate the broadband access market, increasing its overall share from 49 percent in February 2000 to 54 percent in June 2002, DSL has been growing at nearly twice the growth rate of cable modems, with the big loser being ISDN,” added Sabia.
Dataquest says that it is the potential for strong revenue streams over the broadband platform which underpins the battle for households between the cable and telecom providers.
“Today, there is only limited switching between broadband modalities, thus whichever provider reaches a household first will likely keep that household as a customer for the long term, ” Sabia said.
“Gartner believes there are a significant number of households, both online and offline, to whom the value proposition of broadband has not been effectively communicated. Whichever provider breaks the code – a creative combination of price and promotion – will tap this latent market, which could potentially nearly double the current level of penetration.”
For a report on the state of broadband adoption in the UK, click Insight Analysis: Broadband Britain – A Progress Report.
