More Signs of Good Times for Broadband, Cellular

Carl Weinschenk

Gartner yesterday released a study that suggests 20 percent of worldwide residents will have broadband access by the end of the year. That's one out of every five households from Antarctica to American Samoa, from Iceland to Uzbekistan. The raw number of households with a fixed connection-422 million-is a quantum leap from the 282 million at the end of last year. Another big jump, to 580 million, is expected by the firm by 2013, though the firm doesn't say whether that's a Jan. 1 or Dec. 31 number.

 

That's interesting news in and of itself. What's especially worthy of note is how deeply broadband has embedded itself in the overall scheme of things. The release quotes Amanda Sabia, principal research analyst at the firm:

 

Consumers may be watching their household expenditure, but dropping their broadband connections is not on the top of their agendas as a way to reduce outgoings.

 

People-including those who lost their jobs and need to use the technology to find another -- see broadband as a necessity. Unless a family is truly indigent, they don't cut electrical power during a recession. They don't cut heating oil. And now, they don't cut broadband.

 

The trend also is upward for wireless services. In June, I spoke to Stephane Teral, principal analyst, Mobile & FMC Infrastructure for Infonetics Research. Though times are tough, people are not turning in their BlackBerries or iPhones -- or their Glides or Razrs. Said Teral:

 

Consumers are hanging in there and do not want to cut their communication services. They want to keep their wireless devices.

 

Indeed, when push comes to shove, people are more willing to chuck their traditional phones than their cells. In a later conversation with another Infonetics analyst, the subject of fixed to mobile substitution-cutting landlines in favor of cellular-came up. Said Directing Analyst Diane Myers:

 

I think the acceleration in the past 12 months is definitely much greater. And not just in North America. It is happening worldwide. People are cutting the cord.

 

Arguably, Myers' assertion that people are switching from wired to wireless doesn't mean there are more customers to telecommunications companies. But it does mean that people are flocking to new broadband offerings at the expense of old narrowband technology.

 

The normal equation would be that businesses, including cellular and broadband, do badly in a recession. The reverse actually is so: People more carefully prioritize their spending in hard times -- and even increase it for tools that will help them weather the storm. This is the case with broadband and cellular. It certainly bodes well for both segments once the economy heals.



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