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Jam tomorrow for broadband suppliers

Too late for Adaptive

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Yesterday, Adaptive Broadband, a California maker of wireless broadband equipment, went bust. The company filed for Chapter 11 and is winding down operations. Maybe someone will buy the technology.

A lot of US broadband service providers are suffering, and consolidation galore is forecast. However, the market does appear to be picking up, judging from a trio of surveys published this week. Can suppliers afford to be patient?

eMarketer takes the ecommerce tack. It forecasts that more than one million small US businesses will turn to xDSL for broadband Internet access by 2003. And it says that companies will upgrade to faster connection technologies in response to bandwidth demands incurred through greater ecommerce activity.

Less than 10 per cent of US businesses connect to the Internet using xDSL, but this will rise to 16 per cent by 2003. Percentages are depressed by the vast numbers of small US businesses (57 per cent!) still linking to the Internet by 56K modem. Growth in the percentage of xDSL subscriptions comes against a backdrop of a growth market for business Internet access. Businesses accessing the Internet will rise from 4.5 million by year end 2000 to over 6.7 million by 2003, eMarketer predicts.

It reckons that xDSL will be the preferred method of access - more secure than cable and cheaper than fibre.

Coming in from the telecommuter angle, In-Stat/MDR reckons that surging numbers of remote workers in the US will translate into "increased demand for broadband services and equipment across businesses of all sizes".

According to the In-Stat definition, a remote worker is probably someone working in a small branch office or from home. Numbers are growing in line with the increasing "fragmentation" of US businesses. Currently there are three million remote branches, jumping to five million in 2005, when 60 per cent of the US workforce will be remotes, In-Stat reckons.

It forecasts that US businesses will spend more than $160 billion on communications services and equipment in 2001, and nearly $260 billion by 2005.

And finally we have Mindbranch, a US research firm, who's interest in broadband lies mainly in the content served over it. It estimates that worldwide broadband Internet subscribers at home will reach 15 million in 2001 and more than 30 million in 2004. Another 50 million people - presumably there's quite a bit of overlap - will be able to access broadband at work by 2004. And presumably, if In-Stat, is right - most of them will be doing this from their remote office.

Mindbranch reckons that revenues for streaming media surveys and storage will $3.2bn worldwide, and $5bn in 2004.

So it's jam tomorrow for broadband equipment suppliers. But how many can afford to be patient? ®

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