Broadband weathers the global storm – but local eddies exist

Despite the world economic crisis, broadband numbers are actually growing a little faster than expected. Point Topic has increased its forecast for the number of fixed broadband lines in the world by the end of 2009 from 493 million to 496 million. The five-year forecast for the end of 2013 has gone up from 683 million to 695 million.

“A major reason for the increase has been the sustained high rate of growth in developing countries,” says Tim Johnson, Chief Analyst at Point Topic.

This has updated Point Topic’s view of the ranking by number of broadband lines in 2013.

“China, the USA, Japan, Germany, India, France Brazil and the UK form the first eight as before, although India and Brazil have moved up the ranking while France and the UK have moved down. Russia and Mexico have replaced Italy and South Korea to take ninth and tenth places in 2013,” says Johnson.

China and the USA alone will account for over 270 million lines between them by 2013, almost 40% of the world’s installed base. Even Mexico will have over 18 million lines, more than in France or the UK today.

“The small increase in the forecasts hides the fact that broadband is having quite a difficult time. It’s not that the recession isn’t having an effect, simply that the effect is turning out roughly in line with Point Topic’s predictions, so far at least,” continues Johnson

Point Topic forecasts broadband growth by looking at the proportion of non-broadband homes which adopt broadband in each time period. This gives a trend growth rate for future periods. Our previous forecast reduced the expected growth rates in most countries to take account of the recession which was then just starting to take shape.

“Now it is possible to compare actual broadband growth in the second half of 2008 with the change in GDP in the same period. Doing this for the 19 countries where we had up-to-date GDP information suggested that there is a small but definite relationship between falling GDP and below-trend growth in broadband. Taking the 19 as a whole, GDP changes seem to account for about 20% of the change in broadband growth. But the effects in individual countries may be much greater depending on local circumstances,” says Johnson

A small majority of countries – 22 out of the 40 covered individually in the forecasts – saw their broadband growth rates fall below the expected trend in the second half of 2008. While some of this will be from different causes (greater availability, price cuts, changes in regulation etc.) it looks probable that the recession has played a major part.

On the other hand, 14 countries are seeing growth rates higher than trend, while the remaining four stayed level. The countries which have raced ahead of expectations are mostly ones which have come a little late to broadband compared with their peers and are now catching up.

Major developing countries in this category include Mexico, Peru, India, Vietnam and Brazil. Industrialised latecomers include Portugal, Greece, Hungary, the Czech Republic and Australia. But some countries which already have high broadband take-up have grown faster than expected as well – Belgium, Hong Kong, Switzerland and Norway.

“As a result we’ve also updated our projections for take-up, that is number of lines per 100 population,” says Johnson.

Point Topic forecasts that by 2012 Norway will overtake Denmark as the leading major country in terms of take up. Norway’s oil-fuelled wealth seems to be driving a higher growth rate in broadband homes. Germany is another country expected to increase take-up more rapidly than average.

“At the other end of the scale there is a group of countries where broadband does seem to have been hit quite heavily by the recession. Some already have a high take-up, such as Denmark, Sweden, Finland and Taiwan, so that broadband is more of an optional extra for the few remaining no-net homes. Others, notably the UK and Spain, are facing a tough time economically made worse by a housing slump,” says Johnson

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For more information including charts and datasets please contact:

Point Topic: Oliver Johnson

Email: oliver {at} point-topic(.)com

Tel. +44 (0) 20 3301 3303

About Point Topic

http://www.point-topic.com

Point Topic is an analyst company focusing entirely on broadband. Point Topic’s international services have a global reputation for providing the most up-to-date and authoritative user statistics, supplier profiles and applications reports on DSL, FTTx, cable and other broadband services worldwide.

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