INTERNET AND BROADBAND

The United States leads the world with over 167 million Internet users of which more than one third have broadband connectivity, according to a study by Arbitron. This study concluded that 64 percent of Internet users who have broadband access were connected through their workplace, and the balance have home access. The Internet has transitioned from text-based email and file transfer in the mid-1990s to digital audio broadcasting and animated advertising in early 2000. The demand for high bandwidth applications such as animation, video streaming, and high-speed connections to corporate networks has led to a multi-megabit bandwidth race. Digital subscriber line (DSL) and cable modem technologies are main contenders for this high bandwidth race, followed by emerging wireless networks.

In the autumn of 2000, the U.S. Department of Commerce found that 51 percent of all American homes had a computer, and that nearly two-thirds of American Internet users had bought something online. These percentages are similar to those of other developed nations, as depicted in Table 3-1.

PERCENTAGE OF PEOPLE WITH INTERNET ACCESS AT HOME OR WORK

Internet Access by Country

By 2001, there were over 2.3 million DSL customers in the United States. Estimates show the market for DSL customers will reach 7.74 million residential customers and 1.83 million business lines, for a total of 9.57 million DSL lines deployed by 2003. High-speed connectivity is a commodity. As service providers adapt their networks and strategies to meet the demand for high-bandwidth services and applications at reduced cost, some are attempting to capture high-bandwidth customers by offering access to key information service providers (e.g., a specific Internet service or digital video provider).

The customers’ key interest in high-bandwidth service includes speeding up large file transfers, viewing high-resolution images and enabling multimedia applications such as streaming audio and video. The attempt of service providers to restrict access to certain information content providers is likely to divert attention from developing cost-effective high-speed networks and create opportunities for other providers to offer access to other information content providers.

Early adopters of broadband services are affluent. Of broadband users, 21 percent of these households have annual incomes over $100,000. Broadband users are also twice as likely to be active online purchasers when compared to low-speed users.* Additionally, most of these users also have cellular phones, PDAs, and other handheld devices such as digital cameras and music players.

In a recent survey of online consumers, 80 percent stated that they would pay approximately $25 per month for broadband access alone; 26 percent of those said that they would pay $50 or $60 for a package of broadband-enabled applications (including premium quality downloadable music or video files) in addition to the cost of broadband access.

As cellular technology connects phones, PDAs, and other devices across networks, wide area networks (WAN), local area networks (LAN) and the personal area network (PAN), we see the emergence of IEEE’s 802.11B as the de facto wireless WAN standard. As major corporations including Cisco, Compaq, Dell, and others are designing their products for faster cable-free network setup in offices and corporation campuses, we believe that the home market will also adapt, according to a study conducted by the Aberdeen Group, the home network market, including both wireless and wired initiatives will hit $13 billion by 2005.

Top International Wireless Markets 2000