US Households Continue Steady Migration to Broadband ISPs
By Mark Long -- e-inSITE, 11/21/2002
Despite the current economic downturn, the results of two recently concluded surveys indicate that American households are steadily moving to new broadband ISP platforms, a migration that had led to increased satisfaction levels among the nation's ever-expanding universe of Internet Web surfers.
Gartner Dataquest reports that 28 percent of all American households on-line today connect to the Internet through a broadband-capable service provider. The high-tech research firm also report that the rate of broadband Internet use in the United States has nearly tripled during the past 28 months, surging onwards and upwards at an average monthly rate of 9 percent. In addition, the survey results indicate that the number of U.S. households accessing the Internet by means of either a broadband or dial-up connection, continues to grow at a monthly rate of 1 percent.
"Neither the economic slowdown, or the relatively high price points for DSL, cable modem and other broadband access modalities have slowed adoption or demand for these access services," said Dataquest Telecommunications and Networking group analyst Margaret Schoener in a statement. "In fact, there are many locations where broadband demand is not being met because DSL and cable modems are not yet available as an option."
As of June 2002, cable modem and DSL together represented about 88 percent of the household broadband access market in the United States, up from 70 percent in year 2000. According to Dataquest, legacy Integrated Services Digital Network (ISDN) modality is rapidly losing ground to faster, less expensive modalities, with ISDN accounting for just 8 percent market share.
Although cable modem technology continues to dominate the broadband access market--increasing its overall share from 49 percent in February 2000 to 54 percent in June 2002--DSL has been growing at nearly twice the growth rate of cable modems, reports Dataquest analyst Amanda Sabia. "Once the ILECs (incumbent local exchange carriers) got serious about deploying DSL, DSL's overall market share increased from 19 percent in February 2000 to 34 percent in June 2002," Sabia noted.
Sabia also believes that there are a significant number of households--both online and offline--to whom the value proposition of broadband has not been effectively communicated. "Today, there is only limited switching between broadband modalities, thus whichever provider reaches a household first will likely keep that household as a customer for the long term. Whichever provider [offers] a creative combination of price and promotion will tap this latent market, which could potentially nearly double the current level of penetration," added Sabria.
According to a new study from Solomon-Wolff Accociates, consumers are increasingly paying attention to the quality of service that they receive from different ISPs, with users of Internet service from Road Runner and Cox Cable reporting the highest satisfaction levels and the highest spending levels of all top-tier ISPs.
"The high satisfaction levels here are an indicator that the customers of Road Runner and Cox Cable feel that they are getting a better value even though they are spending more," reports partner S. Joey Wolff in a prepared statement. "Internet users can get very inexpensive service if they want, but those using dial-up and discount services are less satisfied."
According to the company's recent survey, customer satisfaction levels for ISPs have steadily increased over the past two years. As of July 2002, almost one third of those surveyed by Solomon-Wolff reported that they were completely satisfied with their ISP service. In addition, the respondents reported that their ISP spending had increased from an average of $19.44 in July of 2000 to $26.73 in July of 2002.
"The increases in satisfaction and spending seem directly correlated to the increased use of broadband services," said Wolff. "Respondents using cable modem and DSL services pay more and have higher satisfaction levels than those using dial-up services."
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