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DSL Wins Subscribers but Lags in User Revenue
Cable modem service ARPU beats DSL service ARPU by $7
DSL service providers have reversed their fortunes in new subscribers,
averaging in the past 12 months 200,000 more new accounts per quarter than
their cable counterparts, but they have sacrificed revenues to do so,
according to Parks Associates’
Broadband
Market Updates: Beyond Bandwidth.
The report found that starting in the second quarter of 2005, DSL
service providers averaged 1.4 million new subscribers over a period of
four quarters, while cable providers averaged 1.2 million new subscribers.
This finding reverses the trend from the previous four quarters, when
cable operators led new-subscriber growth by the same margin of 200,000.
This strong growth in DSL services is not without its cost. According
to
Broadband Market Updates: Beyond Bandwidth, the ARPU (average
revenue per user) for DSL services was $34 in the first quarter of 2006,
compared with $41 for cable modem services. The highest variance was $18,
between the DSL service provider with the lowest ARPU and the cable
operator with the highest ARPU.
“For the next few quarters, DSL service providers will continue to lead
in new-subscriber growth,” said
Yuanzhe (Michael) Cai, director of
broadband and gaming at Parks Associates. “Our Q1 2006 consumer data show
that among people intending to subscribe to broadband, 48% prefer DSL
services and only 18% prefer cable modem services. Nevertheless, being a
price leader may work in the short run, but in the long term, DSL service
providers need to create appealing multiplay service bundles. Cable
operators have leveraged their bundling strategies to conceal broadband
price differentials and maintain strong subscriber growth while keeping a
consistent ARPU and low churn rate.”
Broadband Market Updates: Beyond Bandwidth analyzes recent market
trends and significant events impacting future development in the
broadband market. It also addresses the outlook for fiber and other
alternative access methods, examines the market potential of VAS and
bundled services, and profiles consumer perspectives regarding broadband
and bundled services.
About Parks Associates: Parks Associates is an
internationally recognized market research and consulting company specializing
in emerging consumer technology products and services. Founded in 1986, Parks
Associates creates research capital for companies ranging from Fortune 500 to
small start-ups through market reports, primary studies, consumer research,
custom research, workshops, executive conferences, and annual service
subscriptions.
The company's expertise includes new media, digital
entertainment and gaming, home networks, Internet and television services,
digital health, mobile applications and services, consumer electronics, and home
control systems and security.
Each year, Parks Associates hosts executive thought
leadership conferences CONNECTIONS™, with support from the Consumer Electronics Association (CEA®), and CONNECTIONS™ Europe. In addition, Parks
Associates produces the online publication Industry Insights in
conjunction with the CONNECTIONS™ Conference series.
http://www.parksassociates.com |
http://www.connectionsconference.com |
http://www.connectionseurope.com
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http://www.connectionsindustryinsights.com
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