Broadband subscriber market looking up

MUMBAI: Seems like a good year in broadband terms. While the number of global broadband subscribers grown 72 per cent in 2002, the republic of Korea, Hong Kong (China) and Canada have topped the list says a report issued by the International Telecommunication Union (ITU).


Fifth in the series of ITU Internet Reports, Birth of Broadband informs that the Republic of Korea leads the way in broadband penetration, with approximately 21 broadband subscribers for every 100 inhabitants. Hong Kong (China) ranks second in the world with nearly 15 broadband subscribers per 100 inhabitants and Canada ranks third with just over 11 broadband subscribers per 100 inhabitants, says a company release. The home users are driving the vast majority of broadband demand in all markets.

According to ITU Head of the Strategy and Policy Unit Dr Tim Kelly, "Broadband is arriving at a time when the revolutionary potential of the Internet has still to be fully tapped. However, while broadband is accelerating the integration of the Internet into our daily lives, it is not a major industry driver in the same way that mobile cellular and the Internet were in the 1990s. It's an incremental improvement, offering Internet access that is faster, more convenient and cheaper than ever before."

The release says that the reason for sharp increase in broadband subscribers is the growing demand for faster Internet speeds. The new generation of broadband services competes very effectively with leased lines, which have traditionally served the corporate sector. In fact, in some markets, broadband can be up to 111 times cheaper, per megabyte per second, than today's private network options.

The cost savings alone suggest a major incentive for business and government users to shift to broadband. With its increased speed and efficiency, broadband also offers an excellent infrastructure for e-government and e-education services, such as online driver's license renewals, electronic tax filing, and online library and learning resources.

According to Kelly, "Approximately one in every 10 Internet subscribers worldwide, or just over 5 percent of the total installed base of fixed lines worldwide, has a dedicated broadband connection. However, many more people share the benefits of high-speed Internet access through a local area network (LAN) at work or at school. In the Republic of Korea, which is approximately three years ahead of the global average in converting Internet users to broadband, broadband subscribers represent 94 percent of total Internet subscribers. By year-end 2002, broadband services were commercially available in approximately 82 out of 200 economies worldwide."

In the United States, broadband is likely to reach the 25 percent penetration mark more quickly than either PCs or mobile telephones have in the past. The vast majority of broadband users today are in the developed world. Since the cost of the service becomes cheaper, some developing countries could also be able to use wireless broadband technology to leapfrog ahead of the traditional wireline infrastructure. Instead of waiting for wireline services, which can be costly to deploy, they can potentially use broadband to develop an integrated voice, data and video network.

Looking at the current status, it is likely that over 15 per cent of households worldwide to have a broadband connection by 2008, forecasts technology research firm ABI. According to the reports, the need for secure, speedy, and on-demand video, voice, and data - the "triple play" - has propelled cable MSOs (multiple service operators), telcos, and the CE (consumer electronics) industry to develop and distribute the means to transmit this information to users worldwide.

It is predicted that the highest share will be coming from North America and the second highest share from Western Europe, followed by Asia-Pacific and the rest of the world, says a ABI release. ABI has also found that while cable broadband is leading in the U.S., worldwide DSL (digital subscriber line) market share as of 2002 is around 60 per cent, whereas cable broadband holds about 40 per cent of the market.

While worldwide digital cable households made up less than nine per cent of the cable households in 2002, this share will grow continuously to reach just over 20 per cent by 2008. However, this will represent only seven per cent of all the worldwide households as of 2008. The DBS (digital broadcast satellite) share of worldwide households will be over 12 per cent in the year 2008, says a

Video-over-DSL will be the new kid on the block, with U.S. ILECs (incumbent local exchange carriers) and CLECs (competitive local exchange carriers) charging ahead with aggressive deployments to fend off cable's triple play offering. Even with higher growth rates, North American household video-over-DSL penetration rates will be trailing those of the Asia-Pacific region by 2 million, in the year 2008.

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