Broadband services market to reach $30 billion by 2005

Sept. 1, 2000

According to a new report from Forward Concepts (Tempe, AZ), broadband consumers are more aware of the availability of local access and are willing to pay more for always-on services. Due to widespread availability and declining prices, the installed base of broadband-enabled consumers is expected to increase to 35 million by 2005. Cable modems are expected to capture almost 60% of the consumer subscriber market, while DSL will hold the largest share in the small-office/home-office (SOHO) and enterprise segments. In addition, penetration into the seven million companies with fewer than 20 employees could reach 40-50%, while penetration into the one million companies with 20-100 employees could reach as high as 75%.

While Internet access will remain a priority, report author Andrew W. Davis warns that service providers must look beyond raw bandwidth and pipelines and begin to utilize DSL and cable modems as the enabling technology for what he calls enhanced services. "These services-including packet voice, e-commerce, distributed education and training, entertainment, virtual private networks for remote LAN access, PBX extensions, gaming, and videoconferencing-will provide the real revenue opportunities and drive consumer retention," he asserts.

The two largest consumer applications for broadband services are Internet access and education/training, categories expected to increase over the five-year forecast period to $6.2 billion and $2.1 billion, respectively. Packet-voice and Internet access will comprise the majority of the SOHO market, with sales of $4.6 billion and $1.3 billion. In the enterprise market, virtual private networks and general Internet access are expected to be the two largest applications, reaching $5.1 billion and $1.7 billion, respectively.

The report, "Broadband in the local loop '00: Applications driving the North American business," provides a five-year forecast and examines the major applications driving the demand for high-speed Internet access in the consumer, SOHO, and enterprise markets. For more information, call (480) 968-3759 or visit