U. S. high-speed subscribers will also expand at double-digit rates, growing from an estimated 28.5 million in 2004 to more than 47 million in 2007.

High-speed Internet access consists of cable modems, digital subscriber lines (DSL), fixed wireless (i.e. local multipoint distribution service (LMDS)), fiber-to-the-home (FTTH), satellite and third-generation (3G) wireless. Cable operators continue to dominate the high-speed access market as a result of their early entrance and widespread availability.

The cable modem market expanded to 12.9 million subscribers in 2003, with revenues increasing 44.1 percent to $6.9 billion. TIA expects double-digit increases in cable modem subscribership through 2006, with growth dropping to 8.7 percent in 2007. Cable modem subscribers will total an estimated 22.4 million in 2007, representing a 14.8 percent CAGR from 16.0 million in 2004. Cable modem service revenues will grow from an expected $8.4 billion in 2004 to $10.5 billion in 2007, increasing at a 10.9 percent CAGR.

Accelerating DSL rollouts will erode cable's reach advantage and moderate subscriber growth. DSL subscribers rose to 7.8 million in 2003. Of that total, 20 percent (1.6 million) were business subscribers, highlighting one of the advantages of DSL -- access to the business market.

Only 5 percent of cable modem subscribers are businesses. Lower prices, faster speeds and increased investment will propel the DSL market. DSL subscribers will expand at a projected 22.3 percent compound annual rate from a predicted 10.8 million in 2004 to 17.5 million by 2007. Service revenues will increase from $7.6 billion in 2004 to nearly $11 billion in 2007, growing at an 18.2 percent CAGR.

"Regulatory certainty helps drive investment," stated TIA President Matthew J. Flanigan. "For example, the FCC's decision last year to deregulate new wireline broadband facilities has resulted in an uptick in DSL deployments and other broadband access technologies.

Now freed from much of the burdensome requirement of sharing new facilities, network service providers should have incentive to compete for the anticipated 47 million broadband subscribers."

Other key findings include:
In addition to cable modem and DSL subscribers, there are more than 800,000 subscribers to other high-speed services, a figure projected to reach 7.2 million by 2007. The largest service is fixed wireless which is expected to reach nearly 2.6 million subscribers by 2007. FTTH is gaining traction. Fiber will emerge as an alternative to cable and DSL in rural and underserved areas, reaching an estimated 1.4 million households by 2007.

Satellites also have broadband capacity. Satellite high-speed Internet subscribers will reach a projected 2 million by 2007. With high-speed alternatives more widely available, dial-up subscriber numbers fell for the first time in 2003, dropping 0.2 percent to 47.7 million from the peak of 47.8 million in 2002.

As migration to high-speed access gains momentum, the dial-up market will continue to decline, dropping to an estimated 39.5 million by 2007. TIA's 2004 Telecommunications Market Review and Forecast provides an overview of telecom's interrelated market segments including network services, enterprise and consumer, mobile and wireless communications, and international markets.

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