Global broadband market defies economic downturn

The global broadband market has defied weak economic conditions and continued to expand in 2009, with both equipment revenue and subscribers rising in the third quarter of this year, according to a new report from iSuppli.

New worldwide broadband subscribers added in the third quarter of this year are estimated to have reached 16.3mn, up 2% from the same period of last year. Meanwhile, global spending on broadband equipment is estimated to have reached US$ 3.2bn for the third quarter of this year, up 6.3% from the same period of last year. iSuppli plans to issue finalised third-quarter subscriber and revenue figures later in the fourth quarter of this year.

For 2009 as a whole, new broadband subscribers are expected to increase to 64.2mn, up 5.2% from 60.99mn in 2008. Worldwide broadband equipment revenue is predicted to rise to US$ 13.2bn in 2009, up 5.8% from US$ 12.5bn 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 Compound Annual Growth Rate (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 thought to be 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,” added Mr. Ratliff. “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 also driving bandwidth demands ever higher, according to iSuppli. The market is described as transitioning from a broadband data paradigm to a wideband multi-service and multimedia paradigm.

“Broadband rates of 1 Mbps to 5 Mbps were fine when Web surfing was the broadband killer app,” said Mr. Ratliff. “But in the new user model, consumers are using IPTV, VoIP, peer-to-peer file sharing, online gaming and streaming audio - possibly all at the same time within a household. We’re quickly moving toward a future where 50 Mbps to 100 Mbps, 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 providers - with the only real difference between them being their access plants.”