Price cuts driving DSL growth

DSL attracted an additional 25 million subscribers globally in the past 12 months, reaching 55 million at the end of September, according to third quarter numbers from the DSL Forum as reported by analyst group Point Topic.

“Prices have come down quite noticeably and I think that certainly has a positive impact on the growth of DSL,” said Tom Starr, president of the DSL Forum. “We have been tracking on a global basis take rates, the number of subscribers, growth rates, the number of subscribers country by country and the data clearly shows that there’s a pretty close correlation between the price of the service and the take rate.”

Japan cements its position as the leading DSL country with 9.2 million total subscribers, followed by the U.S. at 8.2 million users and China at 7.8 million subscribers.

Not surprisingly, China led subscriber growth in 2003, added 2.2 million lines in Q3 alone. Japan was the second fastest growing nation at 971,400 additional subscribers while U.S. providers added 667,700.

“The interesting development is Japan now for the first time is clearly number one nationally in the number of subscribers,” Starr said. “In the last report that was sort of almost tied to the U.S., but now it’s clearly pulled ahead and if you take a look at the trend lines I think it’s a very safe prediction that China is going to very, very soon be in first place in number of subscribers.”

South Korea continues to lead the rest of the world in market penetration, with more than 30% of the country’s population subscribing to some form of DSL. More than 20% of South Korea subscribers have upgraded to VDSL services.

Despite the high take rate in South Korea, Starr said he still expects to see growth in that country, especially as ADSL customers transition to VDSL.

Despite fierce competition from cable modems, Starr said he sees no sign of a plateau in the U.S. DSL penetration level and expects the growing deployment of voice over IP to drive DSL growth in many countries.