When it comes to Internet access, a growing number of home PC users are feeling the need for speed, but are having a difficult time getting their fix.
According to a study released today by the Yankee Group, nearly two-thirds of PC-owning households in the United States are interested in faster Internet access. However, with few consumers having access to such a service today, cable and telephone companies are challenged to take this opportunity to grow business.
Among households that are currently online, interest in faster Internet access is even greater, the survey revealed. Forty-one percent of those online were very interested in high-speed Internet access, and an additional 43 percent were somewhat interested. This is a significant increase in interest from the year before, when only 25 percent of online households said they were very interested in high-speed Internet access, the firm said.
In addition to more and more home PC users wanting high-speed data (HSD) services, more people said they are willing to pay for such services, the survey found. Thirty-six percent of online households are willing to pay $40 per month--close to 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 United States are just beginning to offer high-speed Internet access services to consumers. While cable operators offering Net access 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 United States and counts approximately 300,000 users, according to Yankee.
Despite the lead cable may have over DSL services, consumers still prefer telephone companies compared to cable, the study found. Given a choice between 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, because nearly half of the respondents currently don't know which one they would choose, the study found.
Consumers "haven't gotten the message yet," said Bruce Leichtman, director of media and entertainment strategies at Yankee. "When they think of data services they think of phone lines."
He said that any company looking to move into a new business is faced with the challenge of convincing the customer that it can provide a good product even if it isn't what they've done before.
"Cable needs to create a mind set not just provide a service," Leichtman said, warning neither the cable or telephone companies should think they have the upper hand because there is opportunity in the market for both to flourish.