By 2013, the number of households worldwide with broadband will near 650 million, increasing the demand for high-bandwidth applications such as video-on-demand and converging social-networking services.

According to international research firm Parks Associates, service providers will have to continue investing in network technologies to accommodate the demand for these high-bandwidth services.

The firm's new report, “Broadband Services: Global Outlook,” found that the number of broadband households worldwide grew by more than 18 percent in 2008, to exceed 400 million . Asia-Pacific is the largest market, accounting for more than 160 million subscribers, and it will have more than 49 percent of the global market share by 2013.

"Bandwidth will continue to be a focus as the operators re-architect their networks to deliver multiple services over the same infrastructure; however, in such a competitive field, bandwidth alone is not enough to win subscribers," said Kurt Scherf, vice president and principal analyst with Parks Associates. "Blended applications, combining services such as online video and customer support, offer operators an opportunity to increase ARPU. In addition, innovative new services will help differentiate service providers, which can then compete on factors beyond pricing or raw bandwidth."

Earlier this month, Vice President Joe Biden outlined a $4.7 billion loan and grant program to develop the infrastructure needed to deliver high-speed Internet access to areas of the U.S. that are underserved or without access. The $4.7 billion is part of $7.2 billion included in the federal stimulus package to improve rural Internet access.

The Commerce and Agriculture Departments are judging the funding applications, and the first round of funding will be awarded in September.