FEBRUARY 11, 2009 -- The telco broadband market experienced a significant downturn in new subscriber additions during 2008, according to iSuppli Corp. (search for iSuppli Corp.).
"New telco broadband subscriber growth saw a 9.1% decline in 2008, following double-digit gains during the prior five years," reports Steve Rago, principal analyst, broadband and digital home for iSuppli. "Hardest hit was North America, with new subscriber additions in 2008 amounting to 3.1 million, down 56.1% from 6.5 million in 2007. The world's developed regions reached broadband saturation during 2008, while developing regions continued to grow. Of these regions, Latin America experienced the strongest growth," he confirms. "While the number of new broadband subscribers declined, global revenues from broadband equipment sales increased year-over-year by 9%."
Driven by the need to upgrade the broadband access network, new Fiber-To-The-Home (FTTH) connections grew by 90%, and new VDSL connections grew by 54% compared to 2007. In the cable world, many European and American operators introduced DOCSIS 3.0, significantly increasing broadband access data rates. iSuppli believes 2008 was a milestone in the growth of very high-speed access networks. Growth in this segment of the broadband market will continue to accelerate for several years.
Telco TV was a major driver of high-speed access upgrades during 2008. Virtually every telephone company and competitive access supplier deployed or made plans to deploy television services during 2008. Overall, telco TV subscribers grew by 8.8 million to end 2008 at a total of 18.5 million.
Telco TV during 2008 transitioned from the early-adopter stage to the growth stage. Global revenues for equipment supporting telco TV ended 2008 at $5.8 billion. Over the next five years, revenue in this segment will grow at a Compound Annual Growth Rate (CAGR) of 20%, iSuppli forecasts.
IPTV, which is a superset of telco TV, will change the way the world views entertainment both inside and outside the home. IPTV represents one of the most significant paradigm shifts in the communications world since the rise of the cell-phone market, say iSuppli analysts.
The battle for the broadband subscriber bundle between the telephone
companies, multiple systems operators (MSOs), and direct-to-home (DTH) satellite providers picked up momentum during 2008. Regional skirmishes during 2007 transformed into major battles in 2008. North America was the most hotly contested battleground.
MSOs, led by Comcast and Time Warner, added 4.3 million new voice subscribers, most of which were previously telephone subscribers. The MSOs in North America also won the battle for the broadband connection, adding 4 million subscribers compared to 2 million for the telephone companies.
The telephone companies countered with a net addition of 3.3 million television subscribers. The broadband subscriber bundle battle will intensify during 2009, even in the face of economic conditions, and will spread to Europe, iSuppli believes.
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