The latest economic crisis may be causing consumers to wait on buying that new car or taking a vacation, but a broadband connection is one thing consumers just won't give up.
And new studies confirm this logic.
Ben Piper of Strategy Analytics, one of FierceTelecom's newest columnists, revealed in his study called How Vulnerable is the Bundle? Economic Effects on US Multiplay Spend that a large majority of consumers it polled were going to keep their broadband connection despite the recession.
"When questioned on their willingness to eliminate or scale back on home broadband, only 4 percent of respondents indicated that they would drop the service completely, implying an impressive 96 percent "keep" rate for broadband," said the report.
Similar trends are being tracked in the U.K. In its annual communications report, Ofcom said U.K. consumers are finding value in both dual play (voice and data) and triple play (voice, video and data) communications bundles. During the first quarter of 2009, 46 percent of U.K. consumers bought more than one service, a 39 percent increase from the first quarter of 2008.
While the second-quarter typically is a slow one for broadband growth, subscriptions remained steady at the U.S.'s three largest telcos.
First there was AT&T. Adding 112,000 U-Verse broadband subscribers during the quarter, Ma Bell saw its broadband base triple from 2008 to reach 1.6 million total subscribers.
Qwest did not fare badly either. During the second quarter, the company reported that it added 34,000 subscribers in the second quarter, a factor it attributes to the ongoing Fiber to the Node-based network build out.
Taking the biggest bet on it next-gen access network is Verizon with its Fiber to the Premises-based FiOS service. Verizon reported that it added 303,000 FiOS Internet subscribers during the second quarter. Of course, during the second quarter the ILEC lost 117,000 DSL subscribers, which the company said were mostly defecting to cable.
But the broadband craze is not just the Tier 1 telco's domain. The largest Tier 2 telcos (CenturyLink, Frontier and Windstream) all saw modest broadband gains.
Since the launch of CenturyLink, a new Tier 2 ILEC created through the merger of CenturyTel and the Embarq, was only completed in July, the companies reported separate earnings/subscribers for the two parts. Embarq said it added 12,000 high-speed subscribers for a total of 1.47 million, while CenturyTel also saw its high-speed Internet customer subscriptions increase from 607,000 to 681,000.
Frontier and Windstream did not fare too badly on broadband either. Frontier added 13,800 high-speed Internet customers, while Windstream added 15,000 new high-speed Internet customers.
Okay, broadband additions during the second quarter were far from being off the charts for any telco. If anything, these numbers show that consumers overall do see the value in the services these connection enable.
An individual user's broadband requirements will obviously vary. For me, the value of my Comcast broadband line lies in my ability to connect to the Fierce Telecom site and interface with my partners in Washington, D.C., plus enabling me to watch the latest episode of Mad Men if I happen to fall asleep while watching it on AMC. Meanwhile, the teenager on my block may spend his evenings either engaging in multi-player game sessions or streaming the latest viral online video.
Obviously, as service providers look to capture more broadband market share, they are going to need to have a range of high speed offerings that meet all of these user profiles.
So the message to the broadband service provider is simple: I may not want to give up my broadband line, but I do want you to tell me about how your offering can meet my own unique needs.
- Sean