Yankee Group Finds Consumer Demand for High-Speed Internet Services
Growing, But Availability is Limited
06:14 a.m. Nov 06, 1998 Eastern
BOSTON, Nov. 6 /PRNewswire/ -- According to a recent survey
of more than 2,000 U.S. households conducted by the Yankee
Group, a Boston-based communications research firm, nearly
two-thirds of the PC-owning households in the U.S. are interested
in faster speed Internet access. However, with few consumers
having access to such a service today, cable and telephone
companies are challenged to take advantage of this opportunity to
grow the business.
Among households who are currently on-line, interest in faster
speed Internet access is even greater, the survey revealed.
Forty-one percent of those on-line were very interested in
high-speed Internet access, and an additional 43 percent were
somewhat interested. This represents a significant increase in
interest from the year before, when only 25 percent of on-line
households said they were very interested in high-speed Internet
access.
In addition to an increase in interest in high-speed data (HSD)
services, there is greater willingness to pay for such services, the
survey found. Thirty-six percent of on-line households are willing
to pay $40 per month (today's typical price for cable modem
service) for HSD services, up from 27 percent last year.
Despite increased consumer interest, cable operators and telephone
companies in the U.S. are just beginning to offer high-speed
Internet access services to consumers. While cable operators
offering cable modem service have taken an early lead over
telephone companies offering digital subscriber line (DSL)
services, cable today can provide service to only one out of every
seven households in the U.S., and count approximately 300,000
subscribers.
Even though telephone companies have yet to deploy DSL services
to consumers, they are still the preferred option versus cable. Given
a choice between a service from a cable company or a phone
company, those most willing to pay for the service, choose the
telephone company 4.5 times more frequently than cable.
However, there is opportunity for either party to emerge, as nearly
half of the respondents currently don't know which one they would
choose.
As telephone companies begin to offer DSL services more widely
and drop their monthly pricing fee to be more competitive, and
cable modem services become available in more markets, the
number of U.S. households subscribing to high-speed Internet
access will grow from fewer than one-half million today to 7
million by 2002, the Yankee Group predicts.
"From year to year, we have seen that there are more households
going on-line, and in those households, more willingness to pay
for the advantages of HSD," says Bruce Leichtman, director of
media and entertainment strategies at the Yankee Group. "It's now
up to the cable operators and telephone companies to respond.
Today, cable operators have a nearly exclusive window to sell their
cable modem service before DSL becomes more of a consumer
reality. Cable operators should take advantage of this opportunity
while it lasts, and move quickly to market their services."
More details on these findings appear in a new report, "Forecasting
the High Speed Internet Market for Consumers: It's About Supply
and Demand," from the Yankee Group's Media & Entertainment
Strategies service. The company's Media & Entertainment
Strategies practice examines the tradeoffs that businesses and
consumers must make as traditional forms of media are joined by
new products, services, and applications.
About the Yankee Group
The Yankee Group (a subsidiary of Primark Corporation) is an
information technology and communications market research firm
which specializes in helping users and vendors link their
technology strategy to their business strategy. Established in
Boston, Massachusetts in 1970, it has built a solid reputation
worldwide for analysis of the key issues in information technology.
Yankee Group clients number more than 700, and represent a wide
range of business and industries. Each year, the Yankee Group
sponsors numerous technology-related conferences around the
world. Additional information is available at
yankeegroup.com.
Primark Corporation (NYSE: PMK; PSE: PMK) is a global
information services organization headquartered in Waltham,
Massachusetts. Primark provides financial, economic, and market
research information services to the financial, corporate and
government markets. Additional information is available at
primark.com. SOURCE Yankee Group
Copyright 1998, PR Newswire
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