Cable Likely to Hold Lead in Broadband-Report
Wed Sep 18,12:23 PM ET
BOSTON (Reuters) - Cable modems, the primary means currently used to connect to the Web for high-speed service, are the next growth area for the Internet as more consumers seek out digital movies and music, a research firm said on Wednesday.
In a research report, Yankee Group said 58 percent of high-speed Internet users were accessing the Web while about one-third of users are using digital subscriber lines.
Cable modems will easily maintain leadership as the most important technology used to connect to high-speed services. At the end of 2001, more than 7 million consumers and 500,000 business subscribers were connecting via cable modem ( news - web sites), Yankee Group said. But cable will likely have to chase DSL in the small business area, they said.
"Emerging technologies have the potential to shake up this forecast in the 2004-2007 timeframe, however, over the next two to three years, the market share for broadband access technologies is unlikely to change substantially," said Matt Davis, broadband access technologies director at Yankee Group.
Internet companies have been aggressively seeking deals with cable operators and digital subscriber lines so they can offer high-speed, or broadband, access to subscribers wherever they live.
For example, in some areas Internet service providers do not have deals to offer their subscribers access via cable but they do have a deal for DSL.
To the consumer, cable modems and DSL offer about the same type of service although some have complained the implementation process for DSL is more cumbersome.
Meanwhile, consumer access of high-speed Internet service through satellite technology has not grown at the rate it had expected, the research firm said, because it saw the proposed merger of EchoStar Communications Corp. and Hughes Network Systems being approval by regulators more quickly.
Between the close of 2001 and the beginning of 2003, 5.6 million U.S. broadband subscribers will be added to the 13.3 million that make up the installed base, Yankee said in its report.
As dial-up growth slows, Internet giants such as AOL Time Warner Inc.'s America Online, Microsoft Corp.'s MSN and Yahoo Inc. have stepped up their efforts to offer high-speed access and services.
"The question most important to mass-market broadband proliferation is now changing from 'Can I get broadband?' to 'Do I want broadband?,"' Yankee Group said, adding that the core issue at the moment was pricing as it costs more than $40 per month in most areas.
