P & F: U.S. Broadband subs will decline 12% in 2009

Fri, 01/09/2009 - 7:05am
Traci Patterson

Broadband subscriber growth will decline in 2009 by 12 percent, with only 5.7 million U.S. households signing up for new service this year, according to a new forecast by Pike & Fischer.

The total number of broadband-connected homes will reach nearly 74.5 million by the end of the year, representing about 63 percent of all U.S. households, Pike & Fischer said in its new report, “Broadband Competition Outlook 2009.”

The cable industry will capture about 75 percent of new broadband subscribers, according to the report. While Verizon and AT&T are providing new fiber-optic Internet services that can exceed the speeds offered by cable, most of their service areas are covered only by DSL, which consumers are increasingly spurning because its speeds are slower than cable, Pike & Fischer said.

The forecast is based on the nation’s economic crisis, which is increasing unemployment rates and slowing housing starts. “Consumers will spend less on communications services as their job security becomes more tenuous and their discretionary income plummets,” the company said.

But broadband customer growth could exceed forecasts if the incoming Obama administration succeeds in its plan to expand broadband availability as part of a major economic stimulus package, according to Scott Sleek, director of Pike & Fischer’s Broadband Advisory Services.

“Government initiatives, such as tax incentives and loan guarantees to help expand broadband infrastructure into underserved areas, could enable service providers to bolster their customer counts.” Sleek said. “In addition, policy makers are likely to support training and education programs aimed at increasing customer adoption of broadband. These steps could offset what will be an inevitable slowdown in subscriber growth.”

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