Home broadband market to hit $88bn by 2007

Music downloads fuel uptake

The residential market for broadband access will be worth around $88 billion by 2007, an estimated sevenfold increase in revenue over the next five years.

Industry consultancy ARC Group estimates that by 2007 almost 300 million business and residential premises worldwide will be wired up to broadband. By 2007, broadband will become the norm rather than the exception, ARC forecasts.

DSL will account for almost a third of all connections closely followed by cable. Satellite, fibre and fixed wireless will all represent a smaller proportion of the market "due to cost and availability factors", according to ARC.

Tim Page, author of ARC Group's strategic report Broadband Access 2002, noted that some operators in the States have recently gone bust, but the long-term future is bright, and that the market will be highly competitive, he says.

Speaking particularly about the UK, Page said: ""A fierce price war will be inevitable, fuelled by BT's reduction in DSL wholesale price. This will result in a more competitive consumer proposition".

"There are positive signs that the broadband industry is starting to take off with the launch of self install DSL and competitive 'triple-play' packages of voice, data and digital television."

More generally "broadband access will be driven by a competitive price war with operators trying to encourage narrowband users to migrate to broadband," he added.

Although the residential market has the largest number of broadband installations (fuelled in large part by MP3 downloads and streaming media), the business market will be the largest in terms of revenue and bandwidth usage.

This is because one broadband business connection may be used by several offices, in the case of multi-tenanted units.

In 2007 there will be over 30 million broadband business premises, with Western Europe accounting for a third of these. In North America, the rise in broadband business will slow down to saturation of the market, but this will the offset by strong growth in Asia Pacific, according to ARC's estimates. ®

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