July 21, 2009

Frost & Sullivan: Fiber is the Future

Strained by the impact of the economy and market maturity, the residential broadband market growth rate is on a decline, according to a new report from Frost & Sullivan entitled "North American Residential Broadband Services Markets Tracker." The report found that the market earned revenues of over $36.7 billion and estimates 78.9 million subscribers in 2008.

Cable still holds its position as the technology leader in the broadband segment, although its market share declined due to the advanced technologies for telcos, such as FTTx, which has increased its market size during the past two years. For the fourth quarter 2008, Verizon posted the highest net additions compared to that of all other providers in North America. (For more on Verizon, click here).

At a technology level, DSL providers' growth rates will witness a downslide year over year as subscribers migrate to higher bandwidth fiber technologies. Satellite is a growing market in small towns, rural markets, and cities where terrestrial broadband is nonexistent.

Fiber technology is the weapon used by traditional telecommunication providers to counter cable operators' deployment of their next-gen DOCSIS 3.0. The Canadian market is a growing market, offering huge potential. Similar to the United States, Canadian telco operators have unleashed their fiber optic networks to compete with cable providers that offer speeds up to 100 Mbps downstream.