GigaOm pointed out a couple of new pieces of research about broadband penetration, speeds and consumer demand in the US. It’s a pretty interesting report but there are a couple of parts that stand out for me;
Low income broadband uptake dropping
Closely linked to the current economic downturn, and the housing bubble burst in the USA, the Pew survey found that households with annual incomes of less than $20,000 have started to cut back on broadband spending. Their broadband adoption rate has dropped from 28% in 2007 to 25% in 2008. I’m a little surprised that the slowdown happened this quickly – I would have thought broadband would be one of the later areas to be cut by households – this study shows that is not the case.
Consumer demands for higher speeds
There is much discussion in New Zealand at the moment about the penetration vs speed argument around broadband – should we focus on increasing the penetration rate or the availability of higher speed offerings. Interestingly, another recent study found that in the US nearly 72% of cable broadband subscribers, and 62% of Telco broadband subscribers are happy with their broadband connection’s quality and speed. Only 24% are interested in getting faster connection and a mere 11% of broadband subscribers would pay an “additional $10 per month to double their Internet speed.”
In addition, the Pew report shows that 35% of dial-up users want broadband prices drop – given flattening Telco revenues that is unlikely to happen. Overall 62% of dial-up users say they are happy to be remain at the speeds they are currently on.
Summary
A distinction needs to be made between business connectivity and consumer connectivity. The research would seem to indicate that ramping up investment in higher penetration of DSL may be unwarranted. This of course pre-supposes that an adequate base level of service already exists – which in all markets (other I guess than South Korea) is debatable. However targeted roll-outs of high speed access where business users need it would seem to be a no-brainer.
