The report, “U.S. Broadband Forecast, 2007 to 2012: LECs Maintain Advantage Over Cable Operators in Quest for New Subscribers” conducted by Jupiter lead analyst Doug Williams along with a three-person research team, found that U.S. broadband penetration is going to reach 86 million households in five years.
Williams attributes the explosion of broadband service to the decrease in introductory pricing, strong growth in demand for bundled services (like VoIP phone) and consumers’ desire for more bandwidth.
“Price reductions are responsible for driving take-rates for DSL services offered by the incumbent local exchange carriers, while higher broadband transmission rates and attractive bundles are driving consumer adoption of cable modem service,” Williams said. “As broadband becomes more attractive to consumers from an economic perspective, current dial-up users will be more likely to migrate to broadband service, and consumers who are new to the online population will never take dial-up service in the first place.”
The growth of broadband does not spell the death of dialup, however. Jupiter estimates that the current 33 million dial-up Internet customers will decrease by more than two-thirds by 2012.
“Despite moderating growth for broadband services, significant market opportunities for broadband service providers still exist,” said David Schatsky, president of Jupiter Research. “Cable operators and local exchange carriers will remain the key market participants, while alternative broadband service providers will continue to struggle to integrate into the mass market.”