Boom Times For U.S. Broadband Usage Expected To Continue

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April 29, 2004 (2:48 PM EDT)

Boom Times For U.S. Broadband Usage Expected To Continue

The number of U.S. homes using high-speed Internet service is expected increase by more than a third by the end of the year, a market research firm said.

In a report released this week, Strategy Analytics predicts the number of broadband households will increase to 33.5 million by the end of 2004 from 25 million today.

Cable modem users are expected to account for 5.2 million of these new subscribers, and DSL service is predicted to add 2.9 million households. About 400,000 homes will use alternate broadband access technologies, such as fiber, wireless, and two-way satellite services.

In addition, the market research firm predicted major changes in the competitive positioning of telephone and cable TV companies delivering broadband.

Cable companies are expected to offer more compelling product bundles that include video, data and telephone services. To compete, telephone companies that have initially attracted DSL customers through low prices will need strong partnerships with satellite TV operators to keep pace.

Cable companies that have moved aggressively in the voice-over-Internet protocol arena include Time Warner, Comcast and Cox. Among telecom and satellite TV operators, SBC and EchoStar, respectively, are building a strategic alliance.