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| Gartner Dataquest Survey Shows Steady Increase of Broadband Access in U.S. Households |
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SAN JOSE, Calif., November 13, 2002 — Twenty-eight percent of U.S. online households connect to the Internet via a broadband connection, according to a survey by Dataquest Inc., a unit of Gartner, Inc. (NYSE: IT and ITB).
During a 28-month survey period, the rate of broadband Internet use in the United States has nearly tripled, experiencing a 9 percent average monthly growth rate. Survey results also indicate that the number of U.S. households accessing the Internet via either broadband or dial-up grew at a 1 percent monthly average during the study period. These findings were obtained from two specific Gartner Dataquest surveys of U.S. households, spanning a 28-month period from February 2000 to June 2002. From the two surveys, 45,000 U.S. households responded via mail-based panel interviews. These households were surveyed to gauge their adoption of the Internet and the connections used to access the Internet. "Neither the economic slowdown, or the relatively high price points for DSL, cable modem and other broadband access modalities have slowed adoption or demand for these access services," said Margaret Schoener, principal analyst for Gartner Dataquest's worldwide Telecommunications and Networking group. "In fact, there are many locations where broadband demand is not being met because DSL and cable modem are not yet available as an option." In June 2002, cable modem and DSL together represented 88 percent of the household broadband access market in the United States, up from 70 percent of broadband access in 2000. The more costly and slower-speed legacy Integrated Services Digital Network (ISDN) modality that served nearly one-third of the broadband households in February 2000 is rapidly losing ground to the faster, less expensive modalities, with ISDN now having only 8 percent market share. "Over the past three years, a competitive battle between DSL and cable modem has developed, with cable companies clearly being more focused and aggressive in the early stages of this race," said Amanda Sabia, analyst for Gartner Dataquest's worldwide Telecommunications and Networking group. "While cable modem continues to dominate the broadband access market, increasing its overall share from 49 percent in February 2000 to 54 percent in June 2002, DSL has been growing at nearly twice the growth rate of cable modems, with the big loser being ISDN," Sabia said. "Once the ILECs (incumbent local exchange carriers) got serious about deploying DSL, DSL's overall market share increased from 19 percent in February 2000 to 34 percent in June 2002." Of the nine census-block regions in the United States, the Pacific (California, Oregon and Washington) and New England (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont) regions are the most highly penetrated regions for online households with broadband access. Thirty-four percent of Pacific online households and 33 percent of New England online households have broadband access. Notably, all regions have shown tremendous growth in online and broadband demand. For example, while ranked last among all the regions in online household penetration, the East South Central (Alabama, Kentucky, Mississippi and Tennessee) ranks third in percentage of online households with broadband access. "Despite the collapse of the dot-com bubble and the focus about government intervention, fundamental demand and supply market factors perceptively narrowed the Internet gap among the nine census regions of the United States," Schoener said. The potentially significant revenue streams to be derived from mass-market Internet connectivity, especially over a broadband platform, underpin the battle for household Internet dominance between cable and telecom providers. "Today, there is only limited switching between broadband modalities, thus whichever provider reaches a household first will likely keep that household as a customer for the long term, " Sabia said. "Gartner believes there are a significant number of households, both online and offline, to whom the value proposition of broadband has not been effectively communicated. Whichever provider breaks the code - a creative combination of price and promotion - will tap this latent market, which could potentially nearly double the current level of penetration." Additional information is available in the Gartner Dataquest Focus Report, "U.S. Mass Market Loves Broadband More Than Ever." This report looks at U.S. households Internet and broadband adoption rates and regional adoption patterns. This report can purchased on Gartner's Web site at http://www.gartner.com/DisplayDocument?id=373045. This information is published by Gartner Dataquest's worldwide Telecommunications group. This group covers the entire spectrum of the telecommunications industry. More information about this group is available on the Gartner Web site at http://www3.gartner.com/pages/section.php.id.2030.s.8.jsp. To subscribe to Gartner Dataquest programs, please call 408-468-8009. Reports can be purchased on the Internet at www.gartner.com. Gartner Dataquest is the recognized leader in providing the high technology and financial communities with market intelligence for the telecommunications, semiconductor, computer systems and peripherals, document management, software and services sectors of the global information technology industry. About Gartner |
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Contact: Tom McCall Gartner +1 408 468 8312 tom.mccall@gartner.com |
