Wired Broadband Access May Be Peaking

A new Face of the Web market analysis report from Ipsos Insight finds that the market for wired broadband Internet access may by peaking, but the potential growth for wireless Internet services may be huge.

“Over the past several years we have witnessed a significant migration within the online population to broadband access technologies,” said Brian Cruikshank, Ipsos Insight’s executive VP and Managing Director of the firm’s Technology and Communications practice. “Most of these users were either upgrading from dial-up connections, obviously craving faster connection speeds, or were new users that jumped straight to broadband access to get online. However, with fewer dial-up users to convert in the future, and fewer net new users to capture, broadband’s mercurial growth may begin to plateau in many developed markets in the near future.”

Ipsos interviewed more than 6,500 adults in 12 key global markets, including 3,798 adults who were active Internet users at the end of 2006. It found that some 77 percent of the global online population reports to access the Internet via a broadband connection, while just 21 percent report using a dialup connection. Although those figures represent a 7 percent increase in broadband access from 2005, they hint that the days when growth in broadband Internet adoption could be measured in double-digit percentages may be over.

Among broadband users, Ipsos finds that high-speed DSL is the most common broadband access technology, the United States, Canada, and Mexico have a much higher percentage of cable modem connections compared to the result of the world. In the U.S., DLS and cable modem technologies represent nearly equal portions of the broadband market (30 and 33 percent, respectively), while in Canada cable modems are the leading broadband technology. Conversely, the Asia Pacific region leads the world in fiber-to-the-home connections. Internationally, the countries with the highest broadband penetration were Japan (89 percent), Germany (84 percent), South Korea (80 percent), China (79 percent), and the United States (71 percent).

If the growth in so-called wired broadband technology is peaking, though, wireless Internet access technologies seem to have significant untapped growth potential. “Despite the fact that wireless Internet access from a PC still remains a relatively nascent behavior—just 15 percent of users connect to the Internet in this manner today—the future of Wireless Internet access looks very promising globally,” said Cruikshank. The study notes that the ownership of notebook PCs continues to climb and is now at 34 percent of the total market, while the desktop PC market segment has remained essentially static for several years. Browsing the Web via mobile phones or other wireless handheld devices is also becoming more common, with 31 percent of adults reporting having accessed the Internet via a phone o wireless device in 2006. Furthermore, in some developing economies, new online users are bypassing both dialup and wired broadband connectivity and diving straight into wireless broadband solutions, simply because “that’s where the ‘access’ opportunities are emerging in these markets.”

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