According to a new report from global research firm Strategy Analytics, cable modem users will account for 5.2 million of these new subscribers, while 2.9 million households will add DSL service. About 400,000 homes will use alternate broadband access technologies such as fiber, wireless, and two-way satellite services.

The report, "Broadband in the US: Service Provider Strategies in a Changing Market," also predicts that the year ahead will see major changes in the competitive positioning of telephone and cable TV companies delivering broadband.

While lower prices and branded content have helped DSL attract first-time customers making the switch from dial-up to broadband, cable operators can target a wider range of consumers by delivering faster access speeds and multi-service bundles.

"Cable's combination of higher access speeds, wider availability and more compelling bundles lets the leading operators target several classes of consumers," notes James Penhune, Director of Strategy Analytics' Broadband Media & Communications practice.

"These include new users as well as a growing number of consumers seeking advanced video services such as High Definition TV (HDTV) and Video On Demand (VOD). At the same time, aggressive cable telephony deployments from leaders like Time Warner, Comcast and Cox will help these companies reach customers seeking simplicity and savings from triple-play bundles combining video, data and telephony."

"To match these advantages, regional phone companies, like SBC and Verizon, must make the most of their partnerships with satellite TV operators," adds Penhune.

"Previous telco-satellite partnerships often failed to produce the simplicity and reliability that bundling is meant to deliver. But if tighter strategic alliances like SBC's deal with EchoStar prove credible to consumers, they will help the telcos keep pace with cable on bundling and postpone the need to consider more costly video strategies such as fiber deployments."

This report also includes competitive analysis of the US market and five-year forecasts of subscriber growth for cable modems, DSL and other emerging broadband technolgies.

Analysts from the company's Broadband Media & Communications practice will be attending the National Cable and Telecommunication Association's show in New Orleans on May 2-4, 2004.

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