June 14, 2004 Scottsdale, AZ-- Representing over one-third of total households worldwide, multi-dwelling units (MDUs) are an enormous current and future market for broadband services, according to In-Stat/MDR. The market research firm reports that while, worldwide, there will only be just fewer than 1 million MDU in-building broadband subscribers by the end of 2004, these subscribers will grow ten-fold by the end of 2008.
"Not only does this market offer a vast subscriber opportunity, technologies applied to the MDU allow for unique services to be offered to this environment, such as tiered service levels and bundled (voice, video, and data) services," says Amy Cravens, a senior analyst with In-Stat/MDR. "Also, this may be a lead market for the introduction of certain broadband entertainment services, such as music, video, and gaming content, as the audience is strong match for such solutions. While such unique services offerings are not currently the norm, the MDU will be an interesting arena to watch as broadband services evolve."
In addition, the MDU offers broadband providers a different business-operating environment compared to singe family neighborhoods. One primary differentiator is the higher rate of subscriber turnover in the MDU due to the often more transient nature of MDU living (especially in North America). While this means potentially loosing subscribers with greater frequency, Cravens says it also means more opportunities to market services to new residents (which are stronger potential subscribers versus recruiting subscribers from other providers). Marketing relationships with property management groups are also becoming more frequent, which better positions the provider for increased penetration within a community.
In-Stat/MDR has also found that:
Asia Pacific is, by far, the largest MDU market, in terms of number of households, representing over 50 percent of the worldwide market in 2004. Furthermore, the MDU market in Asia Pacific is growing faster than any other region. North America is a relatively small MDU market in comparison to Asia Pacific and Europe.
MDU residents tend to be younger than those in single family units (except in the instance of retirement communities), with a high concentration of college students and young professionals. It is also this demographic that is associated with heavy Internet usage and with strong adopters of new technologies. The MDU resident also, however, typically has less disposable income versus the average SFU resident, making it important for providers to demonstrate the value of their service offering to potential subscribers.
The report, "Multi-band: Markets for Shared Broadband Access - Part Two: Residential (MDU)" examines deployment trends for serving these MDU residents worldwide. Both traditional, as well as in-building deployment strategies, are explored and forecasted. Additionally, primary data on the US MDU market is presented.