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Cable Technology Feature Article

November 09, 2009

16 Million More U.S. Broadband Customers Over Next Five Years

By Gary Kim, Contributing Editor

Nearly 16 million new U.S. broadband subscribers will be added over the next five years, and most of those net adds will come as dial-up users switch to broadband. More than half of those additions will come in the next two years, according to Doug Williams, Forrester Research (News - Alert) analyst.
Among other implications, the new forecast illustrates the fact that some forms of broadband access have become a “legacy” product already purchased by most consumers. Simply put, most people who want to buy the product already do so.
Over the next five years, for example, digital subscriber line subscriptions will likely fall, as fiber-to-customer connections increase from four percent to 10 percent of connections. Cable modem subscribership will remain steady, with only very modest overall broadband market share loss compared with telco broadband, says Williams.
But service providers will continue to wring growth out of sales of more-expensive tiers of service, he predicts. Both increased supply and increased demand will drive that shift to higher-speed tiers of service.
The issue for Verizon (News - Alert), AT&T and independent telcos will be whether fiber access services are perceived by customers to be a “new” product or simply a better way of using an existing product. In other words, what new things does a fiber connection allow users to do that an existing DSL connection or cable modem connection does not?
For some customers, the answer might be “entertainment video,” even though most observers seem convinced there will be no “killer app” for optical fiber access. For some early adopters, the mere fact that the connection use optical fiber might be enough to drive adoption.
Beyond that, it might be difficult to point to specific unique values a fiber connection provides for the typical user, beyond “speed.” One suspects that will change over time as users are provided new things they can do.
As email drove dial-up, and the Web drove broadband, other new apps are going to drive optical fiber access. Right now video is a prime candidate for the specific new app, though one suspects some new feature related to smartphones and fixed broadband will emerge.

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Erin Harrison