Daily Research News Online no. 2993 - Wide Highway Overtaking Narrow

Wide Highway Overtaking Narrow

March 12 2004

Broadband continues its rapid growth in the US, overtaking dial-up in a major metropolitan market (San Diego) for the first time, according to the Fourth Quarter 2003 ISP Market Share Report from analysts ComScore. Many other major cities are poised to follow suit, including New York, Boston, LA and San Francisco.

More than one in four Internet users responding to a separate comScore survey say they intend to switch ISPs in the next six months, most of them to a broadband provider. By far the most commonly cited reason for changing ISPs was the desire for a faster connection.

The report details broadband penetration at both the national and local market levels based on consumer behavior in the fourth quarter of 2003. Across the US as a whole, 36% of online users accessed the Web through a high-speed connection in the fourth quarter of 2003, up 2 points from the third quarter.

Comcast is the leading broadband provider, supplying c.19% of broadband users and 7% of all online users. SBC, the country's largest DSL provider, accounts for 11% of consumer broadband connections and 6% of total ISP subscriptions. AOL remains way out in front when both types of connection are taken into account.

Internet Service Provider (ISP) Market Share U.S. Consumer ISP Subscriptions Q4 2003 Source: comScore Networks
		Market Share
	Total U.S.	100%
1.	AOL (America Online)	28%
2.	Comcast	7%
3.	United Online	6%
4.	Microsoft Corp.	6%
5.	SBC	6%
6.	EarthLink	5%
7.	Road Runner	4%
8.	BellSouth	3%
9.	Verizon	3%
10.	Cox Communications	2%
	All Other	30%

Note: Shares based on subscriber accounts through which direct Internet access is provided and which are actively used in analysis period. (i.e., does not include "Bring Your Own Access" subscriptions

Broadband usage is notably more common in larger markets, with approximately 40% of Internet users in the top 50 markets enjoying the benefits of a broadband connection, compared to a national penetration level of 36%. Only three top-25 markets (St. Louis, Sacramento, Indianapolis) were ranked among the ten markets with the lowest broadband penetration.

Connection Type by Market Top 50 Local Markets Q4 2003 Source: comScore Networks
Top 10 Broadband Markets			Top 10 Narrowband Markets
	Broadband	Narrowband		Narrowband	Broadband
San Diego	52%	48%	Albuquerque - Santa Fe	76%	24%
Boston	50%	50%	Grand Rapids	70%	30%
New York	49%	51%	Harrisburg, PA	70%	30%
Providence, RI	47%	53%	Indianapolis	70%	30%
Kansas City	46%	54%	Sacramento-Stockton	69%	31%
Detroit	45%	55%	Birmingham	68%	32%
Tampa-St. Pete	45%	55%	Nashville	68%	32%
Orlando	44%	56%	Louisville	67%	33%
San Fran - Oak-SJ	44%	56%	Memphis	66%	34%
Los Angeles	44%	56%	St. Louis	66%	34%

At a national level, 63% of broadband subscriptions are cable connections, while DSL subscriptions account for approximately 37% of the high-speed market. In nine of the ten markets with the highest broadband penetration, the majority of subscribers with a high-speed connection use cable modems. The exception to this pattern is San Francisco, where approximately 60% of broadband subscriptions are DSL accounts.

The survey about intentions to switch revealed that, after the desire for a faster connection, the second most popular reason for switching ISPs was price. Low cost provider United Online fared well among dial-up suppliers in the fourth quarter.

According to Russ Fradin, executive vice president of comScore Networks, 'a significant number of consumers are benefiting from intense competition among incumbent phone and cable providers, as well as newer market entrants. It's clear that increased promotional activity and lower prices introduced by these competitors are fuelling the momentum of broadband growth, particularly in larger markets'.

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.