DSL To Overtake Cable, Says Allied Business Intelligence.

Business & Technology Editors

OYSTER BAY, N.Y.--(BUSINESS WIRE)--July 5, 2000

"The demand for high-speed Internet access will increase from 2.3 million US subscribers in 1999 to 42 million in 2005, a compound average annual growth (CAAG) rate of 162%," says Joshua Wise, an analyst at Allied Business Intelligence Inc (ABI). There will also be a worldwide jump in broadband subscribers from 5 million in 1999 to 91 million in 2005, a CAAG rate of 160%.

This is according to ABI's report, "The DSL Solution: ADSL/SDSL Equipment & Subscribers." This report addresses the DSL market -- focusing on ADSL, but keeping a strong eye on SDSL and the rest of the DSL family -- in several world regions from 1999 to 2005. The report focuses on DSL development in the US, western Europe, the Asia-Pacific Rim and other areas as well.

There are two technologies available today that allow low-price multi-megabit data transfer rates -- DSL (Digital Subscriber Line) and cable modem. So far, cable has been the clear leader, due in large part to its earlier market entry. As of the end of 1999, high speed cable Internet service had 2.1 million US subscribers while DSL only had 500,000 US subscribers, according to ABI.

In 1Q 2000, some DSL providers were seeing 50% to 60% increases in subscription rates. The demand for DSL would maintain such an increase for at least another year; however, the local exchange carriers cannot deploy the service fast enough. Some providers are already experiencing significant backlogs because they cannot train technicians fast enough, but this should be resolved by the end of the year.

In the coming year, DSL will rise in popularity due in no small part to aggressive advertising campaigns by DSL providers, large and small. As the subscriber base grows and the industry learns how to deploy DSL efficiently and economically, with help from the recent "line sharing" ruling by the FCC, the waiting lists will shrink and the "DSL horror stories" will become less common.

Allied Business Intelligence Inc, is an Oyster Bay, NY-based technology research think tank publishing strategic research on the broadband, wireless, electronics, networking and energy industries. Details of these studies can be found at www.alliedworld.com or by calling 516-624-3113.