Tough Quarter for US Broadband--Is DSL the New Dial-Up?

Boston, MA - 3 September 2008 - Q2'08 proved to be one of the most challenging on record for US Broadband Service Providers (BSPs), according to a report just released by Strategy Analytics, "US Broadband Insight Q208: Cable is Quarter's Silver Lining, But is DSL the new Dial Up?"

BSPs added only one million net additional subscriptions in Q2'08, compared to over two million in the previous quarter. Particularly hard-hit were the Telcos, some of which saw 90% sequential quarterly drops in net additions. Cable companies fared slightly better, which provided the only positive news in an otherwise difficult quarter.

"The dramatic downturn in the quarter is largely attributable to a slowdown of `new connects,' as well as consumer migration from DSL to cable," noted John Lee, Analyst in the Strategy Analytics Multiplay Market Dynamics service. "As users become more accustomed to high speeds at the office or elsewhere, they are less willing to tolerate slow performance in the home."

Ben Piper, Director of the Strategy Analytics Multiplay Market Dynamics service added, "The Telcos' core DSL offerings are unable to compete effectively with Cable; they must step up their already frenetic fiber roll out to stay in the game. Indeed, we are starting to see DSL become the new Dial Up."

This report provides covers performance metrics of the eight leading US Broadband Service Providers, as well as strategic insights, market analysis and recommendations.