Technology | Media | Telecommunications

Monday, March 10, 2008

Broadband Value-Added Services Upside

By 2012, close to 33 million U.S. households will have broadband services with speeds of 10 Mbps or higher, capable of streaming high-definition video, according to the latest Parks Associates North American Broadband Market Update.

At year-end 2007, 5.7 million, or 9 percent of U.S. broadband households, had such speeds.

"Until recently, telecom operators' aggressive deployment of deep fiber services and the competitive reaction from cable MSOs fueled the growth of high-bandwidth broadband services," said Yuanzhe (Michael) Cai, Director of Broadband and Gaming, Parks Associates.

"As consumer excitement over pure bandwidth subsides, however, service providers will have to deliver appealing, bandwidth-intensive, value-added services such as HD video streaming and content place-shifting in order to retain customers and increase ARPU."

Investment in new broadband technologies such as FTTx and DOCSIS 3.0 and the growing breadth of broadband entertainment content are key market drivers. However, service providers' missteps in bandwidth management practices, uncertainty around network neutrality, and the contentious relationship between facility-based broadband service providers and over-the-top Internet companies may slow progress.

"If high-bandwidth broadband services fail to reach mass-market consumers, the United States may lose its competitive edge in the next round of technology innovation," Cai said. "Such a scenario would be unpleasant."

North American Broadband Market Update highlights current broadband market conditions, analyzes significant events impacting future development, addresses the outlook for fiber and other alternative access methods, examines the market potential of value-added services, profiles consumer perspectives regarding broadband and value-added services, and forecasts future growth.