Developing regions drive global broadband growth in 2012

EL SEGUNDO, USA: The developing regions of the world will be the biggest source for new broadband activity in 2012 as the total number of global broadband subscribers approaches the 700 million mark, according to an IHS iSuppli Broadband & Digitally Connected Home Market Tracker report from information and analytics provider IHS.

Broadband subscribers in the emerging regions of Asia, Latin America and the Middle East/Africa (MEA) are projected to rise by 17.4 percent in 2012, growing to 375 million, up from 320 million in 2011.

In comparison, subscribers in the developed markets of North America and Europe will expand by only 6.8 percent, increasing to 298 million, up from 279 million in 2011. “Broadband growth will be quickest in the world’s currently underpenetrated or underserved markets, typically found in less economically advanced territories,” said Lee Ratliff, principal analyst for broadband & digital home research at IHS.

“Meanwhile, the regions first to enjoy the fruits of broadband—usually the group of economically prosperous countries—will show more modest increases because of market saturation.”

Middle East and Africa get on broadband bandwagon
Broadband telecommunication services will increase most rapidly this year in the MEA region, where subscribers are projected to grow by as much as 38 percent. Asia and Latin America will also be strong areas with double-digit growth in 2012, compared to the single-digit expansion rates forecast for the broadband markets of Europe and especially North America. Overall, the number of global broadband subscribers will climb to 672.9 million in 2012, up a solid 13 percent from 598.3 million in 2011.

Although the MEA region will experience the fastest growth of all regions, the total number of broadband subscribers there remains the smallest at 18.7 million, up from 13.6 million in 2011. Egypt and South Africa will have the most prominent broadband activity in the MEA market, with 2.8 million and 1.2 million subscribers, respectively.

Asia and Latin America on the rise
The area with the next-highest broadband activity this year will be Asia, with overall growth projected at 17 percent. However, the continent is bifurcated into areas of high growth for developing countries like China, India and Indonesia; and into markets with lower expansion rates for the highly industrialized economies of Japan, Hong Kong, Singapore, South Korea and Taiwan. Broadband subscribers in Asia for 2012 will amount to an estimated 301.8 million, up from 258.5 million last year.

Latin America, which combines the Central and South America regions, will boast a 15 percent expansion this year as broadband subscribers hit 54.6 million, up from 47.4 million. Mexico is the star performer in this market with a projected total of 10.9 million broadband subscribers in 2012, followed by Brazil with 4.9 million.

Slow growth for Europe and North America
The two markets with slower growth anticipated this year include Europe and North America, with modest increases of 8 percent and 6 percent, respectively. Europe has the slightly higher growth between the two because of a dynamically expanding Eastern Europe, pushing total broadband subscribers in all of Europe to 194.3 million, up from 180.8 million. The top three territories in Europe are Russia with 28.8 million, Germany with 28.3 million and the United Kingdom with 26.4 million.

The North America market will see broadband subscribers pass the 100 million mark this year, including the United States with 93.1 million and Canada with 10.3 million.

In the United States, broadband subscriber activity was particularly notable during the third quarter last year, with growth climbing a remarkable 46 percent, reversing the 56 percent decline that had occurred in the second quarter. The large swing in growth between the two quarters is not out of line with normal seasonal trends for the broadband industry, even though the seasonal difference seems to be getting more extreme in recent years.

Overall, telcos and cable operators are battling fiercely to win new subscribers, competing on a relatively even playing field as both camps have access to almost every single US household. Telcos fared well during the initial uptake of their fiber services a few years ago, but that growth has moderated. Cable operators first regained the lead in the last half of 2009 and have held on to majority share every quarter since then, accounting for as much as 55 percent of net adds in the American broadband market during the third quarter last year.

ADSL maintains lead
Among the various broadband and even faster wideband technologies being deployed around the world, the broadband technology known as asymmetric digital subscriber line (ADSL) continues to make up nearly half of all net additions with 48 percent share during the third quarter. ADSL growth is driven by demand in developing regions, particularly China and Latin America.

Compared to ADSL, various fiber technologies had market share ranging from 3 to 21 percent. Cable modems were responsible for 9 percent, while the wideband technology called very-high-bit-tate figital subscriber line (VDSL) accounted for 6 percent.

Source: IHS iSuppli, USA.