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Emerging markets drive global broadband market

Posted: 23 Apr 2012 ?? ?Print Version ?Bookmark and Share

Keywords:emerging market? broadband subscriber? telecommunication?

According to IHS Inc., developing regions from across the globe will be responsible for driving the total number of global broadband subscribers to reach the 700 million mark. This year, broadband subscribers in the emerging regions of Asia, Latin America and the Middle East/Africa (MEA) are seen to rise by 17.4 percent, growing to 375 million, up from 320 million last year.

In comparison, subscribers in the developed markets of North America and Europe will expand by only 6.8 percent, increasing to 298 million, up from 279 million from last year, noted IHS. "Broadband growth will be quickest in the world's currently underpenetrated or underserved markets, typically found in less economically advanced territories," stated Lee Ratliff, principal analyst for broadband & digital home research at IHS. "Meanwhile, the regions first to enjoy the fruits of broadbandusually the group of economically prosperous countrieswill show more modest increases because of market saturation."

Broadband telecommunication services will increase most rapidly this year in the MEA region, where subscribers are projected to grow by as much as 38 percent. Asia and Latin America will also be strong areas with double-digit growth, compared to the single-digit expansion rates forecast for the broadband markets of Europe and especially North America.

Overall, the number of global broadband subscribers will climb to 672.9 million, up a solid 13 percent from 598.3 million last year.

Global broadband subscriber forecast

Broadband subscribers in Asia, Latin America and the Middle East/Africa are projected to rise by 17.4 percent this year, growing to 375 million, up from 320 million last year.

Although the MEA region will experience the fastest growth of all regions, the total number of broadband subscribers there remains the smallest at 18.7 million, up from 13.6 million in 2011. Egypt and South Africa will have the most prominent broadband activity in the MEA market, with 2.8 million and 1.2 million subscribers, respectively.

The area with the next-highest broadband activity this year will be Asia, with overall growth projected at 17 percent. However, the continent is bifurcated into areas of high growth for developing countries such as China, India and Indonesia, and into markets with lower expansion rates for the highly industrialized economies of Japan, Hong Kong, Singapore, South Korea and Taiwan. Broadband subscribers in Asia this year will amount to an estimated 301.8 million, up from 258.5 million last year.

Latin America, which combines the Central and South America regions, will boast a 15 percent expansion this year as broadband subscribers hit 54.6 million, up from 47.4 million. Mexico is the star performer in this market with a projected total of 10.9 million broadband subscribers, followed by Brazil with 4.9 million.

Momentum slows for Europe and North America
The two markets with slower growth anticipated this year include Europe and North America, with modest increases of eight and six percent, respectively.

Europe has the slightly higher growth between the two because of a dynamically expanding Eastern Europe, pushing total broadband subscribers in all of Europe to 194.3 million, up from 180.8 million. The Top 3 territories in Europe are Russia with 28.8 million, Germany with 28.3 million and the United Kingdom with 26.4 million.

The North America market will see broadband subscribers pass the 100 million mark this year, including the United States with 93.1 million and Canada with 10.3 million.

In the U.S., broadband subscriber activity was particularly notable during 3Q11, with growth climbing a remarkable 46 percent, reversing the 56 percent decline that had occurred in Q2. The large swing in growth between the two quarters is not out of line with normal seasonal trends for the broadband industry, even though the seasonal difference seems to be getting more extreme in recent years.

Overall, telcos and cable operators are battling fiercely to win new subscribers, competing on a relatively even playing field as both camps have access to almost every single U.S. household. Telcos fared well during the initial uptake of their fiber services a few years ago, but that growth has moderated. Cable operators first regained the lead in the last half of 2009 and have held on to majority share every quarter since then, accounting for as much as 55 percent of net adds in the American broadband market during the third quarter last year.

ADSL stays in top
Among the various broadband and even faster wideband technologies being deployed around the world, the broadband technology known as asymmetric digital subscriber line (ADSL) continues to make up nearly half of all net additions with 48 percent share in Q3. ADSL growth is driven by demand in developing regions, particularly China and Latin America.

Compared to ADSL, various fiber technologies had market share ranging from 3-21 percent. Cable modems were responsible for nine percent, while the wideband technology called VDSL accounted for six percent.

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