Kagan Projects Average of 7.3 mil. New HSD Subscribers Per Year Over Next Five Years.

MONTEREY, Calif. -- Growth in new high-speed data (HSD) customer additions for cable operators is expected to crest in 2005, according to a new report from Kagan Research, but the continued migration of dial-up customers promises continued expansion for the industry. Kagan's HIGH SPEED DATA OUTLOOK forecasts cable modem subscribers will top 38 mil. by 2009, amid intense competition from DSL providers.

"High speed data services have finally overtaken dial-up connections as the dominant pathway to the Internet for U.S. consumers," says Kagan senior analyst Ian Olgeirson. "Though we anticipate growth rates to tail off going forward, cable and DSL providers face considerable opportunity in the fight for market share."

The battle for new subscribers hinges directly on value, with cable staking out its speed advantages and DSL providers using aggressive discounting to lure new customers. While cable has seen a gradual erosion of its share of the HSD marketplace, the industry is expected to remain the dominant provider in the five-year outlook, according to Kagan Research.

Kagan's HIGH SPEED DATA OUTLOOK reports on the state of the U.S. Internet access market, and projects growth and market share of HSD services provided by cable modem, DSL, broadband wireless and satellite services through 2009. The study outlines bundling strategies, bandwidth trends, market opportunities, historical subscriber additions by operator, and exclusive projections on household growth, revenue and market share. Relevant industry statistics and exclusive projections based on Kagan's respected forecasting model include:

--Cable currently dominates the HSD market with approximately 60% market share. Kagan projects that will shrink to 53% by 2009, with telco providers growing share from 35% in 2001 to 40% in 2009.

--The average recurring monthly revenue from a cable sub is more than $41, leading to a total annual revenue of $9.5 bil. in 2004. The average recurring monthly revenue from the average DSL sub at $32 generated annual revenues of $5.76 bil. in 2004.

--BellSouth at the end of 2004 had the highest penetration of DSL subscribers to total access lines at 9.8%. With an estimated 16.9% penetration of DSL subscribers on primary access lines, BellSouth was second only to SBC's 22%.

For Table of Contents and more information on HIGH SPEED DATA OUTLOOK visit www.kagan.com/HSD/101405

About Kagan Research, LLC.

Kagan Research consulting and publishing services offer exclusive financial data and analysis, relevant market advisories and expert 5- to 10-year projections on cable and DBS, broadcast television and radio, movies, entertainment and sports, digital, wireless and Internet technologies and media finance and law.