Broadband market expands despite economic downturn

EL SEGUNDO, USA: Defying weak economic conditions, the global broadband business is continuing to expand in 2009, with both equipment revenue and subscribers rising in the third quarter, based on a preliminary estimate from iSuppli Corp.

New worldwide broadband subscribers are projected at 16.3 million in the third quarter of 2009, up 2 percent from 16 million during the same period in 2008. Meanwhile, global spending on broadband equipment is forecasted to rise to $3.2 billion in the third quarter, up 6.3 percent from $3.1 billion in the third quarter of 2008.

iSuppli plans to issue finalized third-quarter subscriber and revenue figures in the fourth quarter.

For all of 2009, new broadband subscribers are expected to increase to 64.2 million, up 5.2 percent from 60.99 million in 2008. Worldwide broadband equipment revenue will expand to $13.2 billion in 2009, up 5.8 percent from $12.5 billion in 2008.

The figure presents iSuppli’s preliminary estimate of quarterly broadband subscriber additions in 2009.Source: iSuppli

“Around the world, telcos are experiencing plunging access line subscribers and voice revenues,” said Lee Ratliff, senior analyst at iSuppli. “However, broadband subscribers are continuing to rise, driving increased data revenue. While access line revenue has eroded at an astonishing CAGR of 10 percent during the last three years, data revenue rose by 6.6 percent during the same period.”

Bundle up
The continued growth in subscribers and revenue is being driven by the battle for the broadband bundle.

“Multiple Service Operators (MSOs), such as cable television providers, are competing intensely with telcos to attract data subscribers by offering complete suites of data, voice and video entertainment services,” Ratliff said.

“The MSOs are adding voice subscribers at a rapid pace, while telcos are offering Internet Protocol Television (IPTV) services. These companies are offering attractive deals to attract new subscribers, expanding the global broadband market.”

Broadband market goes wide
Bundled services are driving bandwidth demands ever higher. The market is transitioning from a broadband data paradigm to a wideband multi-service and multimedia paradigm, according to iSuppli.

“Broadband rates of 1Mbit/Sec. to 5Mbit/Sec. were fine when Web surfing was the broadband killer app,” Ratliff said. “But in the new user model, consumers are using IPTV, VoIP, peer-to-peer file sharing, online gaming and streaming audio—possibly all at the same time within a household. We’re quickly moving toward a future where 50Mbit/Sec. to 100 Mbit/Sec., i.e., wideband data rates, will be standard. The race for wideband is expected to continue for several years as both incumbent telephone companies and MSOs morph into multimedia services providers—with the only real difference between them being their access plants.”

Source: iSuppli