Driven by rising demand for Internet access, particularly from China and other developing regions, the global broadband subscriber base is set to rise by more than three-quarters in the coming years, with 415 million new consumers projected to come online from 2010 to 2015.
The number of broadband subscribers worldwide will amount to 948.6 billion by 2015, up from 533.3 million in 2010, according to an IHS iSuppli Broadband & Digitally Connected Home market tracker report from information and analysis provider IHS. This year, broadband subscribers will reach 600.2 million, up 12.5 percent from 2010.
Global broadband subscriber activity is a long-term barometer of the overall health of the broadband industry, as well as an accurate prognosticator of forthcoming prospects for the space’s allied markets in broadband equipment and broadband-related semiconductors. While the long-term expansion of the market is a safe bet, quarterly growth is dependent on such factors like the state of the economy, seasonality, regional dynamics and consumer confidence.
Among the regions, Asia is expected to grow a robust 16 percent from 2010 to 2015. Already, China and the Asia-Pacific region account for a disproportionately large share of new subscribers this year. China alone accounted for 38 percent of new subscribers in 2011, followed by Asia-Pacific with 14 percent. However, the Asian territory as a whole is bifurcated: Much-lower growth in the future will occur in developed countries like Japan, Hong Kong, Singapore and Taiwan, compared to the rapid expansion to take place in developing areas such as China, India and Indonesia.
Growth also will be very fast in Eastern Europe, Latin America and the collective region of the Middle East and Africa known as MEA, with growth rates to approximate between 16 and 33 percent. Meanwhile, North America and Europe—where broadband penetration is among the highest in the world—will see slower expansion in broadband subscriber numbers, at rates of 5 and 7 percent, respectively.
In the United States, broadband subscriber activity has been particularly dynamic, with telephone companies and traditional cable providers competing fiercely to win new customers. Although the telcos and their offerings—exemplified by AT&T Uverse and Verizon FiOS—fared well during the initial uptake of their fiber services, that growth has moderated. As a result, traditional cable providers like Comcast and Time Warner have taken back the lead, accounting for as much as 58 percent of net additions in the region during the second quarter, the latest time for which full figures are available.
In the broadband equipment market, the transition from broadband to much-faster wideband technologies has kept revenue growth healthy. Equipment revenue in the second quarter climbed to $3.3 billion, up a solid 14 percent from $2.9 billion in the earlier quarter.
Among technologies, asymmetric digital subscriber line (ADSL) continues to account for more than half of all net additions in the world with 51 percent share in the second quarter, driven by demand in developing regions, particularly China and Latin America. The combined market share of fiber technologies came in second with about 34 percent of the market, followed by cable modems at 9 percent and the technology known as very-high-bit-rate digital subscriber line (VDSL)—a speedier variant of ADSL—with 6 percent.
In the broadband semiconductor market, Ikanos Communications Inc. from California continued to lose share as it shifted away from ADSL to focus on VDSL. The beneficiaries of such a development have been Broadcom Corp., also of California, and Lantiq, an international fabless semiconductor company based in Germany.
The three vendors have converged in the VDSL market, with Ikanos gaining a point of share in the second quarter after six quarters of market share losses to Broadcom and Lantiq.
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