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DSL Drives Broadband Growth Worldwide

By Jay Lyman
Sep 23, 2004 10:44 AM PT

Touting research that showed the world's DSL broadband connections grew by more than 30 million subscribers in the year ending in June, the DSL Forum claimed the broadband technology is doubling and dominating broadband cable connection growth.

DSL Drives Broadband Growth Worldwide

Analysts pointed out that there was a sizeable gap between DSL and broadband cable deployments, which used to dominate high-speed connections. But they reinforced the forum's findings of DSL growth, citing as reasons price, ease of deployment and technological advancement.

The DSL Forum research, conducted by Point Topic, indicated that in the year leading up to June 2004, global DSL subscribers reached 78 million at a rate that was double that of other technologies, including cable. Point Topic reported that overall broadband subscribers grew globally to 123 million in the same period, a growth rate of 55 percent.

Value and Vanity

Meta Group senior analyst David Willis told TechNewsWorld that the DSL and overall broadband growth, particularly in the U.S., was being driven by a number of factors, but was really a recognition of the value of broadband to consumers.

"They'd like to have the latest and they're trying to keep up with the Joneses," Willis said. "It's required suburban jewelry."

Beyond the increasing market demand and psychological factors, Willis said DSL technology itself has improved to allow better coverage and convenience. Price drops on the equipment side, for DSL modems for example, and the ease of setting up connections have also helped drive growth, Willis said.

Products and Price

Willis said while DSL may be viewed simply as high-speed Internet service in the U.S., the technology is viewed and used more robustly outside of North America.

"The rest of the world views DSL in a different way, and carriers see DSL not only as a broadband delivery mechanism, but often as a way to deliver entertainment services and voice services," Willis said.

He referenced Point Topic's finding that China is leading the world in delivery of DSL broadband services, referring to the "multi-service capabilities" of the DSL technology throughout Asia.

Willis -- who said DSL's capability and image is changing in the U.S. thanks to efforts such as AT&T's CallVantage and those from Vonage -- added that while price cuts had been largely responsible for DSL's North American gains, cable broadband providers have not responded.

"The cable guys haven't reacted by dropping price -- yet," Willis said. "I think they'll have to," he added, referring to DSL Internet service that is under US$30 in some bundled packages.

Both Broadbands Growing

Forrester analyst Lisa Pierce said that compared with a couple of years ago, DSL has grown at a faster pace than cable because the barriers of installation, ordering and customer service have been addressed.

Pierce told TechNewsWorld that new DSL capabilities have increased bandwidth, allowing the technology to compete more effectively with cable.

The broadband analyst added that although cable companies continue to experience good, healthy growth, their price points are higher, and that is driving even more vigorous DSL growth.

DSL's Tech Edge?

Frost & Sullivan industry analyst Imran Khan credited DSL gains to lower price and expanded deployment that has resulted from increased line accessibility and a lifting of line-sharing requirements by the Federal Communications Commission.

Khan told TechNewsWorld that although he expects cable will continue to lead in terms of overall number of broadband subscribers, DSL might have a technology edge because it is a dedicated line, making it easier to take on multiple users. Cable broadband, on the other hand, can run into bandwidth issues in dense neighborhoods.

"DSL has a technical advantage because of that," Khan said.

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