ALU: Broadband services recession resistant

JUNE 25, 2009 -- Consumers are unwilling to part with their broadband services at home even in the midst of the economic downturn, preferring to cut spending on things like dining out and leisure travel, according to a series of recent studies sponsored by Alcatel-Lucent.

JUNE 25, 2009 -- Consumers are unwilling to part with their broadband services at home even in the midst of the economic downturn, preferring to cut spending on things like dining out and leisure travel, according to a series of recent studies sponsored by Alcatel-Lucent (search Lightwave for Alcatel-Lucent).

These findings were uncovered as part of a global study exploring the impact of the economic recession on spending for telecom services and the role broadband services can play in promoting global economic growth and social welfare. The study, conducted as part of Alcatel-Lucent's Market Advantage Program (MAP) -- in cooperation with market research firms Penn, Schoen & Berland Associates and Ipsos MediaCT -- employed statistical analysis to determine how consumers prioritize household spending, given a recessionary mindset, comparing the relative value of a wide variety of specific fee-based services.

Broadband services appear to be nearly recession-proof, asserts the systems vendor, with 84 percent of consumers identifying broadband as an essential network service and therefore the least likely target for spending cuts. The studies also showed that more consumers globally are planning to subscribe to and/or upgrade their broadband services, even while reducing spending in other areas. Key factors driving this preference include a desire to reduce the cost and travel time associated with commuting, coupled with a preference for greener alternatives. In developed countries, respondents also noted a growing dependence on the Web as an information source, business tool, social network, and entertainment venue.

"This clearly shows that people across the world rely on broadband services as a central part of their social and economic lives," said Tim Krause, chief marketing officer for Alcatel-Lucent. "As the world looks at ways to address the twin challenges of economic growth and climate change, our research shows that broadband and the digital economy must absolutely be at the top of decision making agendas."

The research indicated that attitudes about broadband cut across regions and socio-economic strata. However, it also revealed distinctions in attitudes about the economy between consumers in high-growth markets and those in more developed markets.

In markets such as France, for example, consumers indicate that the financial crisis has had a greater negative impact on their household when compared to consumers in other countries.

In contrast, people in emerging countries are more optimistic about the future than those in developed countries around the world. While two-thirds of consumers indicated they are cutting expenditures, 85 percent of consumers from emerging countries indicated that their household economic situation would be the same or better a year from now compared to 64 percent of respondents in the developed countries.

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