Tuesday, December 5, 2006

90 Percent Broadband by 2008

Cowen & Co. expects the dial-up Internet access market to have declined by 29 percent by the end of the year. Analysts also expect broadband share of U.S. Internet households to reach 72 percent by year-end. "We expect U.S. broadband penetration to reach 72 percent of total Internet households in 2006, 84 percent in 2007, and 90 percent in 2008," Cowen analysts say. "We believe dial-up access...will disappear within the next six to eight years," the analysts say. "We estimate that dial-up subscribers will decline to 20.6 million in 2006 and 12.4 million in 2007."

Cable companies reported 1.3 million net broadband additions in third-quarter 2006, up 20 percent from 1.1 million in the year-ago period. DSL service providers added 1.2 million residential subscribers in third-quarter 2006, down from 1.3 million in the year-ago period, assuming 10 percent of total DSL net additions are nonresidential.

AOL is a big reason for the decline. "We estimate that AOL's dial-up subscriber base will decline rapidly to 3.3 million at the end of 2007 from 9.6 million in the third quarter." AOL reported a decline of 1.9 million dial-up subscribers in the third quarter, which represents a 17 percent sequential decline in the subscriber base. Total AOL dial-up subscribers are down 35 percent year over year to 9.6 million from 14.7 million in third-quarter 2005.

The EarthLink premium dial-up subscriber base declined by 132,000 in the third quarter, compared with a 163,000 decline in the second quarter. PeoplePC, EarthLink's value dial-up asset, reported net additions of 51,000 in third-quarter 2006. United Online lost 131,000 subscribers in the third quarter.

Cowen & Co. also says U.S. VoIP subscribers increased 19 percent quarter over quarter to 6.9 million in third-quarter 2006, excluding Skype and similar nonsubscription services.

1 comment:

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