Telcos Spend 8 Times More Than Cable Modem Providers To Compete In Broadband Access

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BOONTON, NJ. March 6, 2002:

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Cable modem and DSL services will account for more than 84 percent of the $37 billion in revenue that service providers reap from North American consumers and small- to medium-sized enterprises (SMEs) for broadband Internet access in 2007; however, the capital expenditures made by the cable companies and the telcos to roll out their respective access schemes will be extremely lopsided, says a new report from Insight Research. Broadband Access: DSL vs. Cable Modems 2002-2007 reveals that telcos will spend eight times more than cable companies on network infrastructure over the forecast period. 

According to the study, North American telcos will spend a total of $4.8 billion from 2001 to 2007 on the network infrastructure necessary to support high-speed Internet access, primarily through the purchase of DSL access multiplexers (DSLAMs), the hardware required to interleave signals together for transport to a network switch. North American cable companies, on the other hand, will spend a total of only $661 million over the same seven-year period, since the cable distribution network acts as a virtual multiplexer, obviating the need for expensive hardware. 

"By 2003, we see the number of DSL connections beginning to gain significant ground on the number of cable modem connections in North America," says Insight president Robert Rosenberg. "The rub is that the telcos will spend eight times more on their networks than the cable companies, so profitability within the two industries will be vastly different." 

Broadband Access: DSL vs. Cable Modems 2002-2007 forecasts consumer and SME demand for broadband access by cable modem, DSL, fixed broadband wireless, and traditional access methods, segmented by North America and Rest of World. The report also examines service provider revenues and equipment revenues for each access method by region. 

A free report excerpt, table of contents, and ordering information is online at www.insight-corp.com/access.asp.

Private Line Services 2003-2008

Donna Savino

at Insight Research