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Gigabit

Broadband Grows… but Slows

Leichtman Research Group Inc. (LRG) reports that more than 8.5 million new subscribers signed up for broadband services in 2007, a figure that factors in the top 19 cable and telephone companies, or roughly 94 percent of the market.

While those additions are nothing to sneeze at, they do confirm that the broadband subscriber ramp isn't as steep as it once was.

According to LRG, top service providers added a record 10.4 million in 2006 and 9.9 million in 2005. In fact, the adds from 2007 marked the lowest since 2003, the research firm said.

Despite that waning growth, U.S. cable (again among the top providers) held its edge, with about 54 percent of the market. Cable had 33.5 million broadband subs at the end of 2007, led by Comcast Corp. (Nasdaq: CMCSA, CMCSK)’s 13.2 million, versus 28.4 million for the top telcos.

But the telcos, helped by AT&T Inc. (NYSE: T)’s leading base of 14.15 million broadband subs, continued to add more to the big bucket. They signed up 4.4 million in 2007, down from 5.65 million in 2006. Cable MSOs, meanwhile, added 4.1 million broadband subs last year, versus 4.8 million in 2006.

LRG president and principal analyst Bruce Leichtman noted that the broadband market “is clearly maturing,” but believes the overall broadband sub base still has many more years of growth ahead of it.

But how well cable can spur continued growth remains largely unanswered. Although several operators are tinkering with faster tiers to keep their existing modem customers happy, they are also deploying or re-launching “lite” tiers targeted to DSL subs or more price-conscious consumers. (See Comcast Has a 'Blast!' in the Bay and Mediacom Adds $30M to '08 Capex.)

— Jeff Baumgartner, Site Editor, Cable Digital News

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