Most top-tier network service providers have reported their Q1 2012 results, and we’ve seen the same trends continue from previous quarters: legacy voice services from traditional providers continue to decline in favor of wireless substitution and replacement by digital (VoIP) services. Cable companies continue to see a net gain for digital voice, although the growth rate continues to be in the slow single digits; much of this net growth is driven by small businesses converting to VoIP.
Most top-tier network service providers have reported their Q1 2012 results, and we’ve seen the same trends continue from previous quarters: Legacy voice services from traditional providers continue to decline in favor of wireless substitution and replacement by digital (VoIP) services. Cable companies continue to see a net gain for digital voice, although the growth rate continues to be in the slow single digits; much of this net growth is driven by small businesses converting to VoIP.
We’ve also seen a few interesting trends in broadband services develop over the last year — and especially the last six months, with the rapid decline of ADSL services in both consumer and small business sectors. Much of this legacy broadband technology is being replaced by fiber-based services like Verizon’s FiOS, or with cable modem services, with notable uptake for the fastest tiers delivered by DOCSIS 3.0 that is now widely available with downstream rates of 50Mbps and above. For example, Verizon has stopped new sales of ADSL services where it has FiOS available. Exemplifying cable company success with faster broadband tiers, Comcast reports that 26% of cable modem customers subscribe to the provider’s top broadband tiers.
COLUMN: Broadband infrastructure: Time for real policy
Even 4G/LTE is a factor because it can substitute for wired connections. For example, Verizon Wireless now offers a “HomeFusion.” HomeFusion customers are connected an LTE wireless modem, receiving downstream speeds of 5Mbps to 12Mbps and upload speed of 2Mbps to 5Mbps. However, since this service also comes with tiered usage caps (e.g. 10GB of data for $60 a month), this wireless option will probably only make sense where wired options are not available.
As we have discussed before, we think much of this demand for more speed is driven by increased demand for video streaming, audio streaming, and videoconference calls. According to reports from Sandvine, fixed line Internet traffic varies by region, but Sandvine found that in 2011, Netflix streaming accounted for over 32% of peak hour Internet traffic in North America. (Sandvine provides network policy control solutions; access to the information about the company and their trend reports can be found by starting here.)
We bring our readers’ attention to these trends because many business users who depend on the Internet for access to unified communications must always share the Internet with other business users and with consumers, and because faster broadband access are also enabling better options for remote access to UC solutions. We’ll continue to monitor how access and applications affect the Internet as we identify evolving trends.
