Broadband Penetration Growth to Slow as Saturation Nears
The rate of growth in broadband household penetration is likely to slow this year, Forrester Research says in a report on Top Consumer Broadband Trends For 2008.
As the market begins to reach a point of saturation, growth in subscribers will taper off slightly during the next year. All told, 2008 will see an estimated 7.6 million new household subscribers in the US, down from 9 million in 2007. Clearly, still an impressive level of growth, but the also the start of a trend of slowed growth in customer base as broadband becomes more firmly established as the typical internet connection format.
In all, broadband market penetration is predicted to reach 58% by the end of the year, or nearly 68 million households. To put this in context: Forrester expects penetration to top out at roughly 70%. At the same time, residential DSL broadband will surpass cable this year.
As a consequence of the growth in higher speed connections, consumption of video content on the internet is expected to grow substantially.
Also, Forrester says, “As consumers rely increasingly on Google and Youtube for content and less on their service provider… ISPs run the risk of being cut out of the content-supported value chain…”
To ensure their place as a critical link in that content value chain in 2008, broadband providers will strike partnerships that allow them to differentiate content that flows through their pipes.
Opportunities for such partnerships have increased with the rise of peer-to-peer (P2P) delivery, Forrester says.
In addition, Forrester does not believe it is likely that alternative access providers such as wireless will pose a real threat to wireline ISPs.
Ultimately, wireline ISPs will face the typical competition in 2008 - each other.
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