Cable Modems Lead DSL in Broadband Consumer Race

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BOONTON, NJ. April 19, 2000:

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Cable modems lead the U.S. market for residential high-speed Internet access with nearly twice as many subscribers as competing digital subscriber line (DSL) service, says a new report by Insight  Research. By the end of this year, two million U.S. homes will be connected to the Internet via cable modems, compared to DSL's 1.1 million residential customers.

According to Insight's report DSL vs. Cable Modems: The Future of High-Speed Internet Access, cable modems will dominate the residential broadband market for the next two to three years. Almost 70 percent of the U.S. population already has cable TV service, supplying a ready-made potential customer base for cable modem service. Moreover, next generation set-top boxes with built-in cable modems will eliminate the need to purchase additional equipment, bringing the monthly cost of cable modem service on par with standard dial-up access. While DSL providers have made great strides over the last year, installing DSL access multiplexer (DSLAM) equipment in over 3,100 central offices, INSIGHT predicts that cable's early lead, continuing network buildouts, and the ability to reach more homes will give cable a slight edge over DSL.

"Cable companies were the first to realize the residential demand, first to provide high-speed access, and first to understand how to price it attractively," says Christopher Whitely, project manager at INSIGHT. "Today, they are offering TV, Internet, and telephony service bundles with an aggressive marketing strategy. However, security problems, shared bandwidth bottlenecks, and slow cable plant upgrades will hinder progress if these issues aren't resolved soon."

Additional data in DSL vs. Cable Modems: The Future of High Speed Internet Access, include five-year forecasts of: servable DSL lines, DSL vs. cable modem penetration rates for residential and small/medium business customers, ILEC vs. CLEC DSL service revenue, price per DSL port, and DSLAM equipment revenue. See www.insight-corp.com/adsl.asp for a study excerpt and table of contents.

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Donna Savino

at Insight Research

973-541-9600