North
Amercian DSL growth slows as prices rise June/July
2001
Digital subscriber
line (DSL) growth is reported to be slowing in North America according to a
study published by consultancy TeleChoice Inc, which records more than 3.5 million
lines installed by the end of first quarter 2001, with the US count alone near
the three million mark.
The total of North American DSL lines was put at 3,504,354 with 2,914,003 lines
in the US at quarter's end. US incumbent local exchange carriers (ILECs) accounted
for 83 per cent of the total, followed by competitive local exchange carriers
(CLECs) with 16 per cent, and inter exchange carriers (IXCs) at about 1 percent.
(Contradicting these figures, last month (May 2001) Qwest Communications International
said that it would expand its DSL coverage to add about 1.3 million DSL-capable
homes and businesses in states where Qwest already provides local phone service.
Qwest said 1.2 million more homes will be brought into the zone in a second
build-out phase next year and bring the total number of DSL-capable customers
to about six million by the end of 2002.)
The ILEC market share increased about five per cent from the previous quarter,
mainly due to the shutdown of NorthPoint, TeleChoice said.
The IXC deployments include only facilities-based deployments, not resold DSLs.
They also do not include Sprint, which counts as an ILEC because currently,
most of its lines are sold through local service subsidiaries, the researchers
said.
Canada counted 590,351 DSLs, up by more than 158,000 for a 37 per cent rise
over the previous quarter, the survey found.
The US numbers represent a 484,814-subscriber increase, but the study showed
that growth had slowed compared to the previous quarter. SBC's 187,000 new subscribers
and Verizon's 180,000 both fell short of fourth-quarter increases.
ILECs increased their base by only 27 per cent, TeleChoice said, down from 46
per cent growth the previous quarter.
With the loss of NorthPoint and others, the CLECs decreased their installed
base by over 7 per cent, resulting in an overall US market increase of 20 per
cent for the quarter.
"Potential customers may have reacted negatively to the fact that incumbents
decided to raise prices or end pricing promotions just as their competitors
were going out of business," one analyst commented.
In contrast, Jeff Moore, a telecom analyst with Current Analysis, US analysis
company, in his report, "Broadband Prices Jump, But The Market Will Land On
Its Feet," says that a new market price of $50 has been established for DSL
services, and that cable broadband players stand to gain some market share because
of the increased cost.
Moore suggests, "Cancellations will be few and the demand for broadband is not
terribly price elastic. Once one has experienced the automobile, it's hard to
go back to the horse and buggy." Moore says the main reason DSL prices have
climbed is because the market can bear it. Back
