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Broadband market withstands recession

Posted: 05 Nov 2009 ?? ?Print Version ?Bookmark and Share

Keywords:broadband? IPTV? VoIP?

Despite the weak economic conditions worldwide, the global broadband business is continuing to expand in 2009, with both equipment revenue and subscribers rising in Q3 09, according to a preliminary report from iSuppli Corp.

New worldwide broadband subscribers are projected at 16.3 million in Q3 09, up 2 percent from 16 million during the same period in 2008. Meanwhile, global spending on broadband equipment is forecasted to rise to $3.2 billion in Q3 09, up 6.3 percent from $3.1 billion in Q3 08.

For all of 2009, new broadband subscribers are expected to increase to 64.2 million, up 5.2 percent from 60.99 million in 2008. Worldwide broadband equipment revenue will expand to $13.2 billion in 2009, up 5.8 percent from $12.5 billion in 2008.

"Around the world, telcos are experiencing plunging access line subscribers and voice revenues," said Lee Ratliff, senior analyst at iSuppli. "However, broadband subscribers are continuing to rise, driving increased data revenue. While access line revenue has eroded at an astonishing CAGR rate of 10 percent during the last three years, data revenue rose by 6.6 percent during the same period."

The continued growth in subscribers and revenue is being driven by the battle for the broadband bundle.

"Multiple Service Operators (MSOs), such as cable television providers, are competing intensely with telcos to attract data subscribers by offering complete suites of data, voice and video entertainment services," Ratliff said. "The MSOs are adding voice subscribers at a rapid pace, while telcos are offering IPTV services. These companies are offering attractive deals to attract new subscribers, expanding the global broadband market."

Bundled services are driving bandwidth demands ever higher. The market is transitioning from a broadband data paradigm to a wideband multi-service and multimedia paradigm, according to iSuppli.

"Broadband rates of 1Mbit/s to 5Mbit/s were fine when Web surfing was the broadband killer app," Ratliff said. "But in the new user model, consumers are using IPTV, VoIP, peer-to-peer file sharing, online gaming and streaming audiopossibly all at the same time within a household. We're quickly moving toward a future where 50Mbit/s to 100Mbit/s, i.e. wideband data rates, will be standard. The race for wideband is expected to continue for several years as both incumbent telephone companies and MSOs morph into multimedia services providerswith the only real difference between them being their access plants."

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