INDUSTRY STUDY FINDS STRONG BROADBAND GROWTH
Despite weakening economy, cable industry reports increase in deployment of broadband services in quarter ended June 30. NCTA survey showed nation’s cable operators added 920,000 new high- speed Internet cable modem subscribers, or more than 70,000 per week, and U.S. cable modem subscribers now total 5.5 million.
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Cable also gained 1.3 million new digital video customers, average of 100,000 new installations per week, increasing nationwide total to 12.2 million, NCTA said. Cable added more than 200,000 new residential telephone customers -- 15,000 per week -- to raise total to 1.3 million. Growth came despite industrywide acknowledgment that upfront cable ad revenue was down, as were purchases of large pieces of telecom equipment.
While industry celebrated gains, new research from independent analyst showed 6-month rate of residential broadband had slowed considerably. Precursor Group study said broadband growth was 34% in first half of 2001 compared with 71% for 2nd half of 2000. “Overall, long-term broadband deployment outlook is much slower than anticipated,” report said.
Seth Morrison, senior vp-marketing for CTAM, said consumer demand remained strong because public no longer considered broadband luxury item but as alternative to increasingly expensive outside entertainment options, such as movies and restaurant dining. “While we have to keep in mind today’s economy, people still need this,” he said. Many consumers require high-speed data to telecommute or need Internet access to perform their jobs, he said.
FCC last week reported number of high-speed Internet connections in U.S. grew 15% last year, to 7.1 million (CD Aug 10 p4). Report said 5.2 million of those lines were for residential and small business subscribers. “The myth of broadband scarcity is being debunked,” NCTA spokesman said. “We've been hearing there’s no deployment. It’s out there.” Adelphia, AT&T Broadband and Comcast are among companies getting market share, spokesman said.
Mike Paxton, analyst for Cahners-In Stat, said NCTA numbers showed “strong growth” considering that his research indicated that IP rollout was slowing cable telephony. Paxton’s report said it would be late 2002 or early 2003 before there was any widespread deployment of IP-based cable telephony. Only 2 major players, AT&T and Cox, are in cable telephony market currently, he said.
Precursor Group analyst Scott Cleland called cable telephony “ambition that has not been fulfilled.” Problem, he said, is that cable lines were designed for entertainment purposes, not with lifeline reliability in mind: “The telephone guys are doing an unnatural act with their architecture, and the cable guys are doing an unnatural act with theirs.”