Tuesday, July 31, 2007

Broadband Growth - Is It Slowing Down?

Om Malik writes about the VZ FiOS numbers in 2Q07:

Even as its DSL-subscriber additions tanked, Verizon saw a sharp uptake in the demand for its fiber connections. ... The company added 203,000 FiOS broadband customers, out of a total of 288,000 in the second quarter of 2007. At the end of the second quarter, Verizon had a total to 1.1 million FiOS customers. In a conference call with analysts CFO Doreen Toben said that about 22% of the new FiOS broadband subscribers are customers who have upgraded from Verizon’s DSL service.

The next story is about Broadband growth. It is slowing down!

The problem is that the slowdown in new additions is happening at much faster rate that one would think. According to UBS Research, the net additions in the quarter for AT&T, Verizon, and Comcast were 1.018 million combined versus 1.67 million last quarter and 1.245 million in the second quarter of 2006.
Many will confuse this story because the difference is Penetration versus Deployment. Both are required. We still need Deployment of broadband to the many places that still do not have a choice in broadband. And Penetration means getting as many customers that broadband passes to take the service (and use it). It also means finding a way to cross the Digital Divide. How do we get people without even dial-up or a computer to use broadband internet access?

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