Even though dial-up will remain the primary method of consumer Internet access through the year 2006, DSL subscribers numbers will continue to gain momentum, according to InStat/MDR. In a recent pair of reports, the high tech market research firm reveals that pent-up demand for broadband is alive and well, forecasting that nearly one out of four online households will subscribe to a broadband service by the end of this year. DSL broadband service, specifically, will grow by 3 million installed lines to a total of 7.6 million subscribers in the US by the end of 2002, with approximately 80 percent of those lines serving consumer households.

For service providers looking to generate more revenues from their consumer customer base, it is important for them to increase broadband penetration. However, service availability is no longer the greater inhibitor to broadband growth. In a recent survey of consumers, In-Stat/MDR found that service price and lack of compelling applications are the main reasons cited by dial-up users on why they don't plan to get broadband service. Yet, interactive gaming, with its captivating and intensive, high speed Internet-friendly video games, promises to continue to drive the demand for DSL broadband connections.

In-Stat/MDR also found that:

  • At the end of 2001, just over 58 percent of all households subscribed to an Internet access service. This includes both dial-up and broadband.
  • Bundling of ILEC services promises to provide a boost to DSL, with projections of 10 percent or better through the end of the year, which will certainly aid in meeting the projected number of installed subscribers for 2002.

New G.SHDSL (Synchronous High Bit Rate DSL) designs, which have now been standardized by the industry, began testing during the third quarter of 2002. This new DSL flavor promises to close the gap between T-1 and T-3 high speed broadband access, bringing affordable 10 Mbps service to subscribers.