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June 29, 2009

Broadband Shrugs off Economic Downturn

By David Sims, TMCnet Contributing Editor


Good news for those of you in the broadband industry: We're addicted. 

Economic downturn or not, consumers aren't giving up home broadband services. They'll cut dining out and leisure travel first, according to a series of recent studies sponsored by Alcatel-Lucent (News - Alert)Last month TMC's Tom Keating blogged on broadband expansion, noting that Cox (News - Alert) Communications "expanded its fastest broadband service to residential and business customers in Northern Virginia. Now offered in Fairfax County and Fredericksburg it delivers up to 50 Megabits per second downloads and five Mbps uploads using DOCSIS 3.0. Last month, this service was launched in Lafayette, Louisiana."


Why is broadband so crucial? Key factors identified by the study include a desire to reduce the cost and travel time associated with commuting, and in developed countries a "growing dependence on the Web as an information source, business tool, social network and entertainment venue." Basically, friends, we're junkies who'll give up toothpaste before broadband.

"This clearly shows that people across the world rely on broadband services as a central part of their social and economic lives," says Tim Krause (News - Alert), Chief Marketing Officer for Alcatel-Lucent. Do tell.

The research also turned up some interesting attitudes about broadband from different regions and socio-economic strata. In markets such as France, for example, consumers indicate that the financial crisis has had "a greater negative impact" on their household when compared to consumers in other countries, the study found.

Yet people in emerging countries are "more optimistic about the future than those in developed countries" - two thirds of consumers indicated they are cutting expenditures, 85 percent of consumers from emerging countries indicated that their household economic situation would be the same or better a year from now compared to 64 percent of respondents in the developed countries.

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The global study, conducted by Alcatel-Lucent's Market Advantage Program on the impact of the economic recession on spending for telecom services and "the role broadband services can play in promoting global economic growth and social welfare," determined how consumers prioritize household spending during a recession, "comparing the relative value of a wide variety of specific fee-based services."

So if you're earning your bread off broadband services you appear to be in luck, as the study found them "nearly recession-proof," with 84 percent of consumers identifying broadband as an "essential" network service not on the table for cuts. Heck, you might even get an extra loaf: More consumers globally are even planning to subscribe or upgrade their broadband services, the study found. 


David Sims is a contributing editor for TMCnet. To read more of David’s articles, please visit his columnist page. He also blogs for TMCnet here.

Edited by Stefania Viscusi


 
 
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