US Broadband Uptake To Slow, Says Parks Associates

This is according to Parks Associates’ Trends In US Broadband Adoption report, which finds that whilst almost half of dial-up users were inclined to upgrade at the end of 2002, this has fallen to under a third. Consequently, 2004’s broadband subs growth rate may fall short of the 50% increase experienced during 2003.

Parks says that service providers need to offer more enticing benefits, such as dramatic price decreases or ‘novel’ bundled service offerings, in order to stimulate the broadband market.

“Continued growth in residential broadband requires an ever-increasing number of dial-up households jumping ship to higher-priced, higher-bandwidth offerings,” says Michael Greeson, vice president of research and strategy for Parks Associates.

“But interest in upgrading to broadband seems to have peaked in Q4 2002 at around 50%, a level of interest that translated into hefty subscriber additions during 2003. As interest in upgrading declines, broadband service providers must reinvent the broadband market message, significantly lower what they charge for service, or offer some unique combination of these two strategies,” concludes Greeson.

Research from Leichtman Research Group (LRG) earlier this month also reports that one third of dial-up subscribers intend to upgrade to broadband. However, LRG takes a more positive spin on its findings, reporting that only 49% of dial-up homes are satisfied with their current service, whilst almost three quarters of broadband customers are satisfied (see Forecasts).

LRG forecasts that the number of broadband subscribers in the US will double over the next four years.