Broadband revolution on hold for next five years

UK pundits have been warning for months that broadband may not be the universal Internet panacea forecast by government. Now the Americans -- acknowledged leaders of the broadband revolution -- are casting doubt on the technology.

A survey from US high-tech market research group Cahners In-Stat Group predicts the pace of growth of broadband in the US is about to slow. This will not come as welcome news for the UK government, which is desperate to catch up with the US and become the best place for broadband in the G7 by 2005.

According to the report -- Hooked on Dial-up: Consumer ISP Trends and Market Share -- most US households will still be relying on narrowband access in 2005. "By the year 2005 there will still be just as many households without Internet access, as those using cable modems or DSL," said In-Stat analyst Daryl Schoolar.

Around 40 percent of US homes will have a narrowband connection to the Internet, with just a quarter of the online population having broadband access via DSL or cable. About 70 percent of US homes are expected to have Internet access by 2005. Thirty percent of households, according to the research, still say they have no need or desire for any form of Net access.

Around 30 percent of broadband homes are connected via ADSL but the majority (60 percent) have cable modem services. A small proportion -- just ten percent -- receive broadband via satellite or fixed wireless.

The findings tie in with research from Jupiter MMXI which predicts a similarly grim picture in Europe. Only 30 percent of online households in the UK are expected to have a broadband connection by 2005, just 15 percent of all homes.

"Germany will be the biggest market for broadband by 2005," said Jupiter analyst Dan Stevenson. "It will have twice as many homes connected as the UK." Stevenson is amazed that the government is still convinced it can become the best broadband nation in the world by 2005.

"I am very surprised the government still stands by that statement. It just doesn't tally with the figures," he said.

For firms hoping to make money from broadband content and services, the future is bleak, Stevenson believes. "The revenue made from broadband will be fairly insignificant by 2005 and most of it will go to the providers," he said.

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