The telco broadband market experienced a significant downturn in new subscriber additions during 2008, according to iSuppli Corp. Of course, the reason is that the market is mature: most users who want broadband already buy it. As a result, the next several years will be about enticing customers to migrate to higher-speed tiers and enhanced services, principally IPTV.
In part, this will lead to a shift in lead product offering and a slower growth rate than broadband access had achieved. Some major telcos are pushing IPTV services more than Internet access, a product category in which there are entrenched incumbents. In the broadband access market, there were no incumbents to dislodge, so growth was not a zero-sum game. In the IPTV market, growth will come in the form of market share shifts, a tougher proposition.
“New telco broadband subscriber growth saw a 9.1 percent decline in 2008 following double-digit gains during the prior five years,” says Steve Rago, iSuppli principal analyst. “Hardest hit was North America, with new subscriber additions in 2008 amounting to 3.1 million, down 56.1 percent from 6.5 million in 2007.
"The world’s developed regions reached broadband saturation during 2008, while developing regions continued to grow," he says. "Of these regions, Latin America experienced the strongest growth."
New Fiber-To-The-Home connections grew by 90 percent and new high-speed VDSL connections grew by 54 percent compared to 2007, iSuppli says. In the cable world, many European and American operators introduced DOCSIS 3.0, significantly increasing broadband access data rates.
The next round of growth therefore will not come in adding new broadband subscribers but getting them to upgrade to higher-speed and enhanced services. Analysts at iSuppli believe 2008 was a milestone in the growth of very-high-speed access networks, and expect accelerating growth in the category over the next several years.
Telco TV was a major driver of high-speed access upgrades during 2008, iSuppli says. Virtually every telephone company and competitive access supplier deployed or made plans to deploy television services during 2008, the firm says. Overall telco TV subscribers grew by 8.8 million to end 2008 at a total of 18.5 million.
Telco TV during 2008 transitioned from the early-adopter stage to the early majority stage, so sales volume should now start to ramp up significantly for several years. North American telephone companies added a net 3.3 million television subscribers in 2008, the company says.
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