2010 USA - Telecoms, Wireless, Broadband and Forecasts

This annual publication details the fixed-line, mobile (wireless) and broadband markets in the USA, as well as examining the digital TV sector and the emergence of new telecommunication services such as VoIP and IPTV. The report also profiles developments in the broader digital economy, including smart energy grids and the nascent e-health, e-government and e-education sectors.

The cable companies continued to be the beneficiaries of the telcos’ landline losses, with cable VoIP subscriber numbers expected to continue its strong growth in 2011/12. In addition, cable companies retained the lead in broadband market share, with cable modem subscriber growth exceeding DSL growth in 2009/10, against the trend witnessed for most of the last decade. This was partly explained by the fact that the telcos were concentrating on their FttH network deployments.

In the mobile market, the WiMAX and LTE open access 4G platforms, to which Sprint-Clearwire and Verizon Wireless and AT&T Mobility respectively have committed, offer significant scope for increased developments in mobile broadband usage.

The telecommunications industry is feeling the effects of the economic downturn, with total industry revenues growing in the single figures during 2009 and early 2010. Despite the slow recovery, a number of sectors, notably the mobile and broadband sectors, are enjoying growth that is many times higher than broader economic growth.

This report contains overviews, analyses and detailed statistics of the US fixed-line, mobile and broadband markets including their sub-markets such as DSL, cable, FttH, wireless broadband, utilities broadband, the Internet, VoIP and IPTV.

Market Highlights:

• Total revenue for the telecommunications industry is forecast to grow by around 10% during 2010 to reach around $1.4 trillion. Growth will continue to be underpinned by broadband uptake and mobile data revenues.
• By 2010, mobile phone usage was increasingly more about mobile data usage than voice services. Most notably, during 2009 mobile data traffic exceeded mobile voice traffic for the first time. Moreover, mobile data traffic is expected to increase by a cumulative annual growth rate of over 100% over the next five years.
• In 2009 the number of mobile-only households overtook the number of landline-only households. During 2010 the number of landline customers will continue to fall, following a nearly 10% decline in 2009.
• In early 2010, the major cable companies reported approximately 22 million subscribers. Although VoIP was making strong inroads into the telcos’ landline revenues, VoIP subscriber growth during 2009 was only 6%, down from nearly 35% in the previous year. This is partly explained by the increasing penetration of non-facilities based providers, such as Skype, into the VoIP market.
• By 2010 the number of homes passed by FttH approached 18.5 million, representing around 13% of all households. Of homes passed, around six million were connected, following an increase of more than 50% during 2009 and comprising a take-up rate of around 31%, up from 27% a year earlier.
• By 2010 the US continued to linger at around 15th on the OECD broadband penetration tables, down from 4th place in 2001. In addition, the US ranks around 23rd in the OECD in terms of average broadband speeds and also trails in affordability.
• Nevertheless, the market is currently witnessing significant investment activity in FttH deployments, DOCSIS 3.0 upgrades, WiMAX network rollout and municipal wireless broadband activity. For instance, by early 2010 an estimated 45% of the cable industry’s 120 million household footprint had received DOCSIS 3.0 upgrades.
• A number of important policy statements have been made by the Obama Administration and the FCC which indicate that policy-makers and regulators alike are concerned about the comparatively slow pace of US broadband developments. In particular, in March 2010 the FCC issued The National Broadband Plan which provides a new visionary direction for telecoms in America, including a trans-sectoral approach to broadband networks. Nevertheless, it is up to Congress to take action through legislation without which it will be impossible to implement the Plan in any timely fashion.
• Although a number of municipal WiFi projects ran into trouble in 2008/09, by 2010 it was becoming increasingly evident that the significant demand for iPhones and similar WiFi-enabled smartphones, netbooks and other WiFi-enabled devices would outstrip the capacity of the cellular networks and would reinvigorate the business models for muni-WiFi networks.
• The USA is still regarded as the leading country in adopting WiFi services, accounting in 2010 for close to 70,000 public WiFi hotspots. It is estimated that the number of free WiFi hotspots will increase by approximately 15% during 2010, bringing the proportion of free public hotspots to more than half of the total.

USA - Forecast mobile broadband users and mobile services revenue growth – 2011 - 2016

(Source: BuddeComm forecasts)

Note: BYE = Base Year Estimate.

Note: all dollar amounts are US$ unless otherwise stated.

Data in this report is the latest available at the time of preparation and may not be for the current year.