Bandwidth Wars: Cable High-Speed Internet Can Expect Competitive
Challenge by 2002 - PRNewswire, 02:16 p.m Dec 21, 1998 Eastern
WASHINGTON, Dec. 21 /PRNewswire/ -- Cable modems are the dominant provider of
residential high-speed Internet services in the US. Cable Internet will face competitive challenges
from alternative technologies in 2002, according to a new study by The Strategis Group,
High-Speed Internet: Demand, Technology, and Strategy. The study predicts that in 2003, cable
modems will still control over two-thirds (68%) of the residential market-down from about 90% at
the end of 1998.
Digital subscriber line (DSL) will emerge as a price-competitive residential product by 2002. DSL
has so far been a tool for CLEC arbitrage in the business data market, but standardization and the
continued development of "G-Lite" (splitterless DSL) will help make DSL into a residential reality.
"DSL and cable technologies have fundamentally different economics. DSL investments are
scalable, giving LECs the option to choose the timing of their deployments," said David Eiswert,
consultant with The Strategis Group.
Cable modem service is priced more competitively than DSL. If DSL and cable high-speed access
are close substitutes, DSL prices will have to come down. "DSL providers must either justify $20
to $30 price premiums, bring price in line with cable, or accept the role of niche provider in the
residential market," said John Zahurancik, director of The Strategis Group's Internet and
Competitive Telephony Group. "We think recent LEC price announcements signal that DSL prices
are on their way to the $40 per month level. The question is how quickly will they fall?"
Interest in High-Speed Internet Access
Price per Month $60 $40 $25
Percent of Users 5.4% 11.4% 42.2%
Source: The Strategis Group, Inc.
High-Speed Internet: Demand, Technology, and Strategy utilizes primary survey data, economic
modeling techniques, and extensive secondary market research to forecast high-speed Internet
trends and identify potential market obstacles. This report describes the struggle for strategic
market positioning by local exchange carriers, ISPs and cable operators. It examines DSL, cable
modem, and wireless solutions, detailing how differences in technology produce distinct business
economics and strategies.
High-Speed Internet: Demand, Technology, and Strategy includes:
* User interest and pricing sensitivity for high-speed Internet access
* Forecast of high-speed subscribers, service revenues, and equipment sales
* DSL, cable, and wireless technology overview
* Discussion of potential regulation's impact on strategy
* Analysis of market strategies and deployment of DSL, cable, and wireless technologies
The Strategis Group, an edr company -- with offices in Washington, D.C., London, and
Singapore -- publishes in-depth market research reports, provides customized consulting services,
and supplies continuous information solutions to the cable TV, satellite, Internet, competitive
telephony, broadband and wireless communications industries. The Strategis Group's market
studies, valuations, and strategic planning provide crucial information to communications industry
leaders throughout the world. High-Speed Internet: Demand, Technology, and Strategy is available
for US$1,800. Please contact David Eiswert at 202-530-7500 (voice), 202-530-7550 (fax), or
deiswert@strategisgroup.com. You may also visit www.StrategisGroup.com for more
information. SOURCE The Strategis Group
Copyright 1998, PR Newswire
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