VDSL2 drives broadband market growth to 643 million subs in 2012, says Point Topic

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Fiber to the home may be the last-mile endgame, but hybrid copper/fiber-based VDSL and VDSL2 drove up the number of broadband subscribers worldwide to more than 643 million, a new Point Topic report reveals.

In 2012, VDSL and VDSL2 grew 27 percent overall, while FTTH grew 3 percent. Overall, FTTx technologies grew 21 percent, beating out cable and DSL, which reported 7.2 and 3.6 percent, respectively.

Point Topic broadband global market share

Global market share by technology, Q4 2012. (Source: Point Topic / Broadband Forum)

"Demand for bandwidth can be satisfied by FTTx solutions, particularly in combination with vectoring, bonding and other incremental VDSL2 improvements so operators will continue to maximize the lifetime of their existing assets," said Oliver Johnson, CEO of Point Topic, in a release.

Despite the growth of VDSL services, copper-based DSL, including ADSL and ADSL2+, still account for 56.95 percent of the market, down from 59.6 percent in Q2 2012. The decline is likely related to existing customers migrating off lower speed ADSL services to the higher speed VDSL2-based services.

Besides AT&T (NYSE: T) and CenturyLink (NYSE: CTL), which offer VDSL2-based services in the United States, a number of large European incumbents have laid out aggressive VDSL2 and vectoring plans.

Deutsche Telekom, for instance, got conditional approval from Germany's telecom regulator to proceed with upgrading its existing copper plant with VDSL2 and vectoring technology. The German telco's VDSL2/vectoring deployment is part of a previously announced a €30 billion ($39 billion) plan to improve its last-mile wireline and long-term evolution (LTE)-based wireless networks.

While AT&T won't announce its Q1 2013 earnings until next week, in Q4 2012 it reported that it added 192,000 U-verse TV subscribers and 609,000 U-verse broadband Internet subscribers. U-verse helped AT&T offset ongoing DSL service losses. Similar trends took place at Verizon (NYSE: VZ) and Cincinnati Bell (NYSE: CBB), which both reported that they added 144,000 FiOS and 5,000 Fioptics broadband subscribers during the fourth quarter.

From a geographic standpoint, China continues to be the dominant broadband market, growing 15 percent, but other countries such as Brazil, India and Russia each reported growth of 3 percent or higher. Meanwhile, established markets such as the United States and France reported sustained growth of 0.77 percent and 0.98 percent, which Point Topic said is a "a sign of broadband strength even during economic challenges."

For more:
- see the release (.pdf)

Special report: Comparing broadband pricing: where do AT&T, Verizon, Cincinnati Bell and others stand?

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