High-speed Net use expected to explode by 2003
By Corey Grice
Staff Writer, CNET News.com
December 1, 1999, 5:35 p.m. PT
Demand for high-speed Net connections has increased to
such an extent that more than 27.3 million people are
expected to use the services over the next three years, a
new study shows.
More than 27.3 million users worldwide are expected to use
digital subscriber lines (DSL) by 2003, up from 70,000 last
year, according to a report released today by market research
firm International Data Corp.
That's good news for U.S. local phone companies and a
handful of high-speed
competitors. The phone firms
have invested heavily in DSL,
but encountered much criticism
over high prices and slow
deployment of the Net access
technology.
DSL, a high-speed technology
that transmits data over
traditional telephone wires, also
has been plagued by a service
outages this year.
DSL and the telephone firms
that are offering broadband
services are competing with
companies that provide
high-speed Net access via
cable modems. It's far from
clear which broadband
technology will become the
preferred means of getting
online--but it's practically certain the business will be lucrative.
Although estimates vary widely, most research firms have said
there are currently more than 100,000 DSL users in the United
States. An earlier IDC report puts the number at 160,000.
In the future, foreign markets are expected to be a large part of
the high-speed Net technology's rising usage. The report found
that Western Europe, where the percentage of DSL users is
expected to jump to 34 percent by 2003 from 6 percent today,
will see particularly strong demand for DSL. IDC expects many
European businesses to convert to DSL from ISDN lines in late
2001, contributing to the area's strong growth forecast.
Overall, IDC expects about 13 percent of all households
accessing the Internet in 2003 to do so using a digital
subscriber line.
Initially geared mostly for business use, DSL is quickly taking
hold in the consumer market where it competes primarily
against cable services provided by such companies as
Excite@Home and Road Runner. A recent federal ruling could
cut DSL prices for consumers, at least among competing local
phone companies, encouraging the spread of the technology.
Although DSL prices have fallen in 1999, IDC expects DSL
service revenue to spike over the next few years. DSL revenue
will total about $2.3 billion in both the U.S. residential and
business markets as early as 2003, according to a separate
study by IDC released earlier this week.
Pent-up demand for faster Net connections will keep growth
rates at exponential levels into next year, according to IDC.
The company forecasts that small-business DSL lines will
increase to 2.5 million lines in 2003, up from 60,000 lines in
1999. Small businesses will account for 20 percent of DSL
lines in the United States, the study shows.
But despite the exploding growth, DSL has yet to make a dent
in sales of more costly T1 lines. Most small businesses are
upgrading to DSL from dial-up or ISDN connections, IDC said.
In the domestic residential market, work-at-home employees
and so-called power users will continue to account for much of
the growth. IDC expects about 9.3 million residential DSL
users in the United States by the end of 2003.
In the future, IDC expects business DSL lines to be packaged
with software application services while consumers will
increasingly purchase DSL lines as part of a bundle with
other communications services.
chris
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