Broadband subscriber numbers continue to gain momentum in an effort to meet the ever-increasing demand for broadband access. Availability of broadband access will remain the biggest challenge for many regions of the world where infrastructures are not built-out or have just begun implementation. Key highlights of the broadband market include:

• In late 2001, the total number of worldwide DSL subscribers exceeded the total number of worldwide cable modem subscribers.
• In the US, cable modem subscribers continue to outnumber DSL subscribers by a wide margin. At the beginning of 2002, in the US, there were 7.12 M cable modem subscribers and 4.6 M DSL subscribers.
• Other broadband technologies, such as satellite broadband, Fiber-to-the-Home (FTTH), and wireless provide services to only 5 percent of total worldwide broadband subscribers.

In the US cable modem service has enjoyed almost 100 percent penetration in the residential market, while only mustering up a very small percentage of penetration in the business community. On the other hand, DSL is deploying broadband service at a much faster rate via on-line service self-installs, but certainly lacks the residential penetration of broadband that cable has managed to create. The triple play by the cable industry, providing a bundled package of voice, video and high speed access to the Internet has given them the edge, especially when compared to DSL. The triple play strategy used by the cable companies must be employed by the DSL industry for continued success in the broadband market place.

The remaining three broadband access technologies, fixed wireless, satellite and FTTH, are expected to continue competing in their own identified niche markets. Fixed wireless MMDS, (Multi-channel, Multi-point Distribution System) is on hold, waiting for those much talked about and anticipated second generation solutions that are seen as solving the high cost of truck rolls in deploying fixed wireless broadband services. LMDS (Local Multi-point Distribution System) continues to suffer from the high cost of providing broadband access, but certainly has a reasonable opportunity to continue growth in the medium and large business sectors.

The unlicensed band of fixed wireless is beginning to enjoy some rather impressive gains in the market capturing broadband subscribers, especially in the tier two and three markets using the 802.11 wireless standard. Wireless Internet Service Providers (ISP) have established themselves as the purveyors of the new 802.11 broadband to potential subscribers seeking high speed access to the Internet in cells with up to three miles of reach. To date, some 1500 wireless ISPs have established themselves as fixed wireless service providers. Each ISP has a minimum of 20 subscribers, currently, and in some cases, ISPs have managed to attract up to 4000 subscribers.

The satellite broadband access technology, as a connection to the Internet for high speed service, has had its challenges over the last couple of years in providing broadband services. Satellite service started off fairly strong in 2000 with a year-end subscriber count of 90,000 connections installed. It seemed as though satellite service was on its way to successfully competing head-on with the other broadband access technologies, however that was not to be, as it ended with a less than optimal showing, when compared to DSL and cable.

For additional information, contact Ernie Bergstrom: