Tight Market for Broadband Favors Higher-Bandwidth Services

  • Broadband Competition
  • Broadband Penetration
SILVER SPRING, MD — Approximately 4 million U.S. households will become new high-speed Internet customers this year, marking a 10 percent decline in subscriber growth rates compared with 2009, according to a new forecast by market research provider Pike & Fischer.

The total number of broadband-connected homes will exceed 77 million by the end of the year, representing about 65 percent of all U.S. households, P&F says in its new report, Broadband Competition Outlook 2010.

With the economy still sputtering, both cable operators and telephone companies will see stunted growth in broadband Internet subscribers, but telephone companies will face a particularly difficult year as they continue to lose DSL customers. Although some telephone customers can access fast fiber-optic Internet services, most telco service areas are covered only by DSL service, which consumers are increasingly spurning because its speeds are slower than cable.

Thus, the report says, telephone companies will add only about 1.7 million new broadband subscribers over the course of the year, while the cable industry will capture about 2.1 million new broadband subscribers.

The current year will also see an uptick in adoption of next-generation wireless broadband services, particularly the WiMAX services being offered by Clearwire, P&F says. Top cable operators such as Comcast and Time Warner Cable, along with Google and Intel, are investors in Clearwire and have agreed to market Clearwire services to their customers. Clearwire is also marketing its services through independent resellers and large electronics retail chains. The company stands to add 387,000 new subscribers to its WiMAX service during 2010, P&F analysts predict.

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