Broadband demand predicted to rebound in second half of 2003

August 18, 2003

While the addition of new broadband households slowed in the second quarter of 2003, research from Parks Associates, a research and consulting firm, suggests increasing dissatisfaction with dial-up is likely to boost broadband adoption in the coming months.



Parks Associates’ 2003 survey reveals that only 11 percent of narrowband subscribers are “extremely satisfied” (ranking the service “7” on a seven-point scale), compared with 30 percent of narrowband subscribers in 2001. (Information provided by 2003 Park Associates)

Data gathered from Electronic Living @ Home, Parks Associates’ latest research initiative, identify this decline with a simultaneous increase in consumers’ likelihood to upgrade, two trends which could create a short-term spike in demand for broadband service.

“When combined, these two factors suggest favorable demand for broadband in the next few quarters,” said Michael Greeson, vice president and principal analyst for Parks Associates. “Although little has changed in the substance and quality of narrowband service, dial-up subscribers are increasingly judging the quality of their connection based on the perception of what broadband has to offer.”

Parks Associates’ 2003 survey reveals that only 11 percent of narrowband subscribers are “extremely satisfied” (ranking the service “7” on a seven-point scale), compared with 30 percent of narrowband subscribers in 2001. Moreover, while only one-third of narrowband subscribers were likely to upgrade to broadband service in 2001, almost one-half of current narrowband subscribers are similarly inclined.

The research suggests that, among the many reasons why people switch to broadband, speed of service inspires two-thirds of such upgrades. “Despite efforts to emphasize unique content, speed of service remains the primary driver,” Greeson said. “Even if Internet usage is confined to e-mail and the occasional downloaded video or audio file, broadband does it faster than narrowband.”

For additional information, visit www.parksassociates.com.

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