RealTime IT News

U.S. DSL Sees 12% Q1 Growth Rate

DSL lines in service in North America totaled 6.2 million at the end of the first quarter, according to new statistics published by TeleChoice, Inc.. The U.S. had 4.8 million subscribers while Canada had 1.4 million.

The U.S. saw a 12 per cent growth in DSL lines during the quarter, with incumbents (ILECs) accounting for 89 percent of the market while the competitive providers (CLECs/IXCs) accounted for the remaining 11 percent. The ILEC market share increased 1 percent from last quarter.

For the U.S. market, net subscriber additions were 538,287. This is the second quarter in a row in which more than 500,000 subscribers were added. Among major ILECs, BellSouth had the largest percentage growth, with overall lines up 17 percent compared to the end of the previous quarter. Overall, ILECs increased their lines in service by 13 percent.

The competitive provider share of the market grew a small 5 percent over the fourth quarter and only now is exceeding the subscriber numbers it had before the Rhythms fallout in the third quarter of last year. The largest player, Covad -- which represents 66 percent of the CLEC market -- grew only 2 percent during the quarter.

The Canadian market once again outpaced the U.S. market during the quarter, with an overall growth rate of 17 percent. Net subscribers grew by 195,217 subscribers, 10 percent less than were added at the end of last year.

"The North American DSL market continued its slow but steady growth again in the first quarter," said TeleChoice DSL analyst Pat Hurley. "None of the major providers offered customers any significant incentives in the first quarter, and the deployment numbers reflect this fact. ILEC dominance of the market has continued, and BellSouth, in particular, has been expanding its market share significantly by continuing to expand its reach with remote terminal deployments and successfully marketing its services against competing cable MSO services."

Added TeleChoice president, Claudia Bacco, "Thirteen percent quarter-to-quarter growth is not insignificant. But this level of growth is not closing the gap with cable companies, who have over twice the market share among residential broadband users. DSL service providers need to continue their reach extension efforts, improve their service marketing and pricing incentives, and move faster towards new value-added service offerings if they want to truly compete with the cable MSOs. The success of cable operators in adding voice services to their video and data portfolio is perhaps the biggest challenge ILECs face in the residential market today, and one they must aggressively fight with their own innovative service bundles if they want to remain competitive in the long run against the cable threat."