Global broadband subscribers to soar in Q3 and Q4

Global broadband subscribers will grow in the third and fourth quarters of this year as China’s demand for high-speed internet access soars, according to market researcg company  iSuppli.

The company said that the market is bouncing back from a slight decline in the second quarter with the major segments of DSL, cable and fibre now growing thanks to growing broadband subscribers.

It said the number of new broadband subscribers worldwide in the third quarter is projected to rise by 5.8 percent to reach 16.5 million, overcoming the seasonal downward pull of the previous period when subscribers tumbled by 6.6 percent to 15.6 million.

iSuppli predicted that the projected third-quarter totals will show that the market nearly caught up to the first-quarter figure of 16.7 million. It said the bounce-back appears to be a prelude to even loftier levels predicted for the final quarter of 2010 as global broadband subscribers rise by 7.3 percent to reach 17.7 million.

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Lee Ratliff, senior analyst for broadband and digital home at iSuppli, said: “Broadband subscriber additions declined in the second quarter because of normal seasonality as well as a poor performance in the North American market.

“However, Chinese consumers’ insatiable demand for high-speed Internet is so high that it will cause subscriber numbers to rise again in the second half of the year.”

He said China was adding broadband subscribers at a rapid rate with this quarter seeing the  addition of approximately 6.0 million subscribers, growth in the second quarter slowed only slightly with the addition of another 5.4 million. He added he did not expect any broadband slowdown world’s most populous country, and each of the final two quarters would see new subscribers numbering 5.7 million.

However, with the good comes the bad and in this case it’s a race between telcos and MSOs (multiservice operators). The company said although subscriber numbers to broadband are growing, the technology that underlies high-speed internet access is changing rapidly.

“As services bundling voice and data drive bandwidth demands higher, the market is transitioning from a broadband data paradigm to a so-called “wideband” multiservice and multimedia model. Data rates of 1 to 5 Mbit/Sec may have been adequate when web surfing was the broadband killer app, but 30 to 50Mbit/Sec. soon will be the norm as consumers migrate to data-intensive applications such as online gaming,” the company warned.

It said that because of this, a race to dominate the wideband market has flared up between the telcos and the multiservice cable operators.

This is most evident in the United States, where telcos such as AT&T and Verizon, and cable operators such as Time Warner, compete on a relatively even playing field, with both camps having near universal access to every American household.

Telcos took the lead in 2008 and extended their advantage into 2009, luring customers away with successful fibre deployments—U-verse in the case of AT&T and FiOS for Verizon.

However, cable operators fought back in 2009 and stayed there until the first half of 2010.