Broadband growth slowing in U.S.

Jeff Richgels  —  8/24/2008 6:14 pm

With the U.S. broadband market maturing, growth naturally is slowing.

The 20 largest cable and phone companies in the country -- which represent about 94 percent of the market -- acquired 887,000 net additional high-speed Internet subscribers in the second quarter of this year, according to Leichtman Research Group Inc.

That is 51 percent of the growth in the second quarter of 2007. Cable firms had 85 percent as many additions as a year ago, and phone companies 23 percent as many; the cable companies added over 670,000 subscribers, representing 76 percent of the net broadband additions for the quarter.

The 20 major providers now account for 65.1 million subscribers -- 35.3 million for cable and 29.7 million for phone companies.

The cable firms now have a 54 percent share of the overall market, with a 5.6 million subscriber advantage over the hpone companies.

"Net broadband additions in the quarter were the fewest of any quarter in the seven years LRG has been tracking the industry," Bruce Leichtman, president and principal analyst for Leichtman Research Group, said in a statement. "While the relative number of quarterly broadband adds has certainly peaked, the decline in additions this quarter compared to the same period last year was exacerbated by Verizon and AT&T's emphasis on selling higher speed FiOS and U-verse bundled services, often at the expense of the traditional DSL service."

FiOS is Verizon's fiber-delivered service that is not yet available in Verizon's Wisconsin markets. U-verse is AT&T's service delivered over its fiber network and copper phone lines that is scheduled to launch in the Madison area some time this year.

DSL is slower than the new services but also more expensive.

In a separate report issued last month, Forrester Research said that 56 percent of North American households now have broadband, up from 48 percent a year ago. Dial-up declined from 17 to 12 percent in that time period.

Jeff Richgels  —  8/24/2008 6:14 pm