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Broadband makes inroads into U.S. households

More Net users are unplugging their dial-up service for a speedier connection. VoIP, online games and home networking boost broadband's growth.

More U.S. Internet users are unplugging their dial-up service for a speedier broadband connection.

According to a study research firm In-Stat/MDR released Tuesday, nearly 27 million U.S. businesses and home users subscribed to a broadband service at the end of 2003, a 48 percent increase from the previous year.


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Voice over Internet Protocol (VoIP) technology, online games and home networking are some of the major drivers of broadband growth, the study says.

"This starts a cycle where growth in both broadband and applications feed the growth of each other," said Daryl Schoolar, an In-Stat/MDR senior analyst.

The study found that one out of five U.S. Internet users connect to the Net via a broadband subscription. Schoolar said that while only half a percent of broadband subscribers are using the technology for VoIP, that figure is expected to grow in the coming years.

Despite fierce competition from DSL (digital subscriber line) providers, cable modem services continue to maintain their lead in broadband, accounting for 58 percent of all users, according to In-Stat/MDR.

But DSL, which claims 35 percent of U.S. broadband subscribers, holds a dominant lead in overseas markets, due to scarce cable networks and greater housing density, the research firm stated.

Meanwhile, fixed wireless broadband is gaining some ground in the United States, now ranking third as the most popular form of broadband subscriptions. Its market share numbers, however, remain relatively small at roughly 5 percent.

"Even in four or five years from now, fixed wireless will continue to be in the single digits, because it's hampered by cable and DSL doing such a good job in blanketing the area," Schoolar said.

Major cable and DSL providers have snagged more of the market by bundling services with their broadband offerings and signing up users based on their brand names, he added. Fixed wireless broadband operators tend to be small, independent providers that serve rural communities.

Looking forward, Schoolar said broadband subscriptions are expected to grow 31 percent this year to roughly 35 million.