DSL Bests Global Economic Woes

In spite of the greatest economic pain the broadband world has ever seen, the world's DSL subscriber base grew by a healthy 90 percent in 2002.

by ISP-Planet Staff [March 17, 2003]

The latest data released by UK-based DSL research firm Point-Topic and the DSL Forum show that the world DSL market is growing fast, from 18.7 million at the end of 2001 to 35.9 million at the end of 2002, a growth rate of 90.8 percent.

South Korea and the U.S. have virtually the same number of DSL subscribers. The report gives the U.S. a DSL population of 6,450,600 and South Korea a DSL population of 6,438,000. While it may sound like the U.S. and South Korea are tied in the broadband race, South Korea's population is one-sixth that of the U.S., meaning that broadband penetration in the U.S. lags by 600 percent

Another nation's success deserves particular note. In Japan, where speeds are fast and prices are low because competition is thriving, the user base grew from 3,301,000 to 5,640,000—in the last six months of the year alone, a rate of 70.9 percent. Japan's user base grew by a staggering 270 percent during 2002. If Japan's current growth rate continues, it will soon have the largest DSL subscriber base in the world.

In spite of global economic pain, the report saw only two nations where the DSL subscriber base has declined: Argentina (where the survival of the financial system itself is in question) and Turkey (no explanation was provided for Turkey's DSL problems).

The report describes three phases of DSL adoption by a nation's population. In the initial phase, the subscriber base doubles and then doubles again very rapidly. Businesses are adopt the new technology before most residential users. As the market becomes more mature, the subscriber growth rate slows to about 70 percent, remaining high as residential users enter the DSL market. Finally, in the third phase, with the market saturated, subscriber growth slows to a crawl.

However, there is only one saturated market in the world, and that is South Korea. During the last six months of 2002, South Korea's DSL market grew from 5,734,000 to 6,438,000. Although that is a handsome increase of 704,000 subscribers, it is only 12.3 percent. In addition to a relatively slow growth rate, a saturated market like South Korea's is characterized by a dearth of dialup. At last count, South Korea's dialup subscriber base was about 10 percent the size of its DSL subscriber base.

In sharp contrast, dialup markets elsewhere in the world remain healthy, although Japan's dialup market may be challenged now or in the future if prices remain low and competition remains healthy (but if prices rise or a competitor fails, Japan's DSL revolution could still fail).

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