Wednesday, May 04, 2005

China to trump U.S. in broadband subscribers

China to trump U.S. in broadband subscribers

By Marguerite Reardon
May 04 2005

China is on track to surpass the United States in broadband subscribers by 2007, according to new market research data.

While the U.S. has been criticized for falling behind in terms of its broadband penetration rates, slipping from 13th place to 16th in a recent International Telecommunication Union report, it has always had the most subscribers. But now it looks as though China will soon take top billing for broadband.

At the end of 2005, China is expected to have 34 million subscribers, compared with 39 million in the United States, according to new data from market research firm iSuppli. By the end of 2007, China will have 57 million broadband subscribers, compared with 54 million in the U.S., said iSuppli. In ensuing years, China is expected to widen its lead over the U.S.

Today there are more than 150 million broadband subscribers worldwide, according to IMS Research. More than 51 million have signed up for service since the beginning of 2004. This tremendous growth rate shows no signs of slowing, and it is forecast that the number of broadband subscribers will surpass 400 million in 2009.

It should come as little surprise that China will soon pull ahead of the U.S. in terms of raw numbers of subscribers, especially considering that China's population of 1 billion is more than three times that of the U.S. More than 10 million people live in Shanghai alone, and more than 7 million in Beijing. The U.S. population is a little more than 300 million.
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China’s economy is also booming, especially in the eastern cities of Shanghai and Beijing where the middle class is growing extremely fast. Some experts say that the country’s economy will quadruple over the next two decades, possibly eclipsing that of the U.S. in the next 20 to 50 years.

Still, predictions that China will surpass the U.S. in broadband subscribers only fuel arguments that the government needs to come up with a national broadband policy--and do it quickly. President Bush has already talked about having broadband universally available by the end of 2007.

But the debate over who will provide that access rages on. Some believe that it should be left up to the private sector, which today includes cable operators and regional phone providers, while others believe that local governments should be allowed to build out their own infrastructure.