Broadband apathy

The adoption of broadband services is being held back by high prices and a lack of compelling reasons for migrating to the service, claims In-Stat/MDR. Service availability is also an issue in the local market.

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By  Matthew Southwell Published  December 31, 2002

The adoption of broadband services is being held back by high prices and a lack of compelling reasons for migrating to the service, claims In-Stat/MDR. Its recent consumer survey shows that 42% of users feel that they have no need for the service, while a further 32% cite its expense as prohibitive. Only 4% of those surveyed said that they had not upgraded due to availability issues.

As a result of these findings, the analyst house suggests that to stimulate the market yet further, carriers have to offer compelling reasons for users to upgrade their existing dial up connections.

“As service providers continue to make broadband available in new markets and avoid going deeper into existing markets, service growth will be difficult to sustain, and eventually will flatten out… In order to avoid this flattening of growth, service providers need to find ways to overcome current dial-up users’ objections to broadband,” reports In-Stat/MDR.

Locally, the issue of availability is still a large one as few of the region’s incumbent telecommunications operators have failed to push ADSL — the only way of gaining legal broadband in the Middle East — to the market.

“First, availability is still limited… second, for the residential market, prices are still relatively high and are not expected to fall to regional averages by the end of 2003 and third, awareness among internet users about ADSL is still low… Finally, the ‘killer’ applications that need high bandwidth are not widely used yet,” explains SaudiNet’s Dr. Al-Musa.

However, this is beginning to change as the monopoly telecommunication companies, such as the UAE’s Etisalat and Saudi’s STC, begin to increase their emphasis on broadband and organisations such as the Arab Broadband Internet Forum clamour for the development of local content.

As such, Dr. Al-Musa suggests that ADSL will be both the region’s and SaudiNet’s fastest growing service in 2003, and that the stagnation of the US market reported by In-Stat/MDR is a long way off hitting the Middle East.

“[ADSL] is the fastest growing service for SaudiNet and [it] has been marketed to all potential segments with different flavours of the service that suit the various customer segments. Growth is expected to accelerate in 2003 due to more service availability and price reductions,” he comments.

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