Strategy Analytics: 8.5 Million US Homes to Add
Broadband In 2004; Performance, Bundling Are Key Advantages for
Cable
2004 will be another banner year for broadband in
the United States, with the number of homes using high-speed
Internet service growing from 25 million today to 33.5 million
by year's end.
According to a new report from global research
firm Strategy Analytics, cable modem users will account for 5.2
million of these new subscribers, while 2.9 million households
will add DSL service. About 400,000 homes will use alternate
broadband access technologies such as fiber, wireless, and
two-way satellite services.
The report, "Broadband in the US: Service
Provider Strategies in a Changing Market," also predicts that
the year ahead will see major changes in the competitive
positioning of telephone and cable TV companies delivering
broadband. While lower prices and branded content have helped
DSL attract first-time customers making the switch from dial-up
to broadband, cable operators can target a wider range of
consumers by delivering faster access speeds and multi-service
bundles.
"Cable's combination of higher access speeds,
wider availability and more compelling bundles lets the leading
operators target several classes of consumers," notes James
Penhune, Director of Strategy Analytics' Broadband Media &
Communications practice. "These include new users as well as a
growing number of consumers seeking advanced video services such
as High Definition TV (HDTV) and Video On Demand (VOD). At the
same time, aggressive cable telephony deployments from leaders
like Time Warner, Comcast and Cox will help these companies
reach customers seeking simplicity and savings from triple-play
bundles combining video, data and telephony."
"To match these advantages, regional phone
companies, like SBC and Verizon, must make the most of their
partnerships with satellite TV operators," adds Penhune.
"Previous telco-satellite partnerships often failed to produce
the simplicity and reliability that bundling is meant to
deliver. But if tighter strategic alliances like SBC's deal with
EchoStar prove credible to consumers, they will help the telcos
keep pace with cable on bundling and postpone the need to
consider more costly video strategies such as fiber
deployments."
This report also includes competitive analysis of
the US market and five-year forecasts of subscriber growth for
cable modems, DSL and other emerging broadband technolgies.
Analysts from the company's Broadband Media &
Communications practice will be attending the National Cable and
Telecommunication Association's show in New Orleans on May 2-4,
2004.
