Making Money in Broadband
by Pat Dorsey | As anyone who's used the Internet from home
knows, there's a real need for speed at the consumer level. Tired of
slow and frustrating downloads, individuals are clamoring for faster,
"always-on" web access from their homes--which is why just about
any company even remotely associated with broadband has seen its
shares skyrocket over the past year. Broadcom BRCM, a maker of
chips for cable modems and set-top boxes, is up almost 200% over
the past year, and @Home ATHM, a provider of high-speed Internet
access over cable networks, has risen over 150%.
With @Home quintupling its subscriber base from 90,000 to 460,000
between the first quarter of 1998 and the first quarter of this year, it's
pretty clear why @Home and Broadcom's shares have screamed
upward--consumers are ravenous for high-speed Internet access, and
the companies providing the access and the equipment are growing
like crazy. Although cable isn't the only way of delivering broadband
to consumers--regular old copper phone lines can also do the trick
once your local phone company upgrades its network with the
necessary equipment--it's by far the most widespread. There are more
than 10 times as many homes in the U.S. currently getting broadband
through cable as there are through phone lines, mainly because the
cable companies have been much more aggressive about rolling out
high-speed access than have the ever-slothful regional bell operating
companies (RBOCs). This is one reason why broadband-by-cable
(and, by extension, companies like Broadcom, @Home, and
RoadRunner) has received the lion's share of investors' attention. |
