Broadband Access to Surge from $57 Billion in 2005 to $156 Billion by 2009

Total spending on Internet access (broadband Internet access and dial-up Internet access) in the international markets reached $113.3 billion in 2005 and is expected to grow to $139.8 billion in 2006 and $221.6 billion by 2009, an 18.3% compound annual growth rate (CAGR), according to TIA's 2006 Telecommunications Market Review and Forecast, an annual study by the Telecommunications Industry Association (TIA).

  2005  2009 CAGR 
Total Spend on Internet Access $139.8 B $221.6 B 18.3%
Broadband Internet Access $57.6 B $156.1 B 28.3%
Dial-up Internet Access $55.7 B $65.5 B 4.2%
Telecom Equipment Revenues $275.9 B $379.5 B 8.3%
Broadband access spending will increase to $81.2 billion in 2006 and $156.1 billion in 2009 from $57.6 billion in 2005, a 28.3% CAGR, the fastest growth of any category. However, that growth will come at the expense of dial-up, which TIA projects will grow at only a 4.2% CAGR reaching $58.6 billion in 2006 and $65.5 billion in 2009, up from $55.7 billion in 2005.

As the Internet market expands in these international regions and online traffic grows, the infrastructure will need to expand. Hence, TIA predicts revenue from telecommunications equipment will increase at an 8.3% CAGR through 2009, from $275.9 billion in 2005 to $379.5 billion in 2009.

South Korea has the world's most advanced broadband market, with 70% household penetration in 2005. The Netherlands is second at 60%, followed by Canada at 52%. Denmark (45%) and Japan (42%) are the only other countries with broadband penetration exceeding 40%. The United States ranks sixth in broadband penetration at 39%, followed by Finland and Switzerland at 35% and 31%, respectively. France at 28% and Sweden at 27% round out the top 10.

China has 35 million broadband subscribers in 2005.  By 2009, nearly a third of all households in Asia/Pacific will access the Internet through a broadband connection. Europe ranks third in broadband penetration at 17.8% in 2005, a figure TIA expects will more than double to 38.5% in 2009. Canada will remain the leader in 2009, as three-quarters of all households are expected to be using broadband. The United States will retain its number two ranking as a region, with penetration rising to 63.1%. From a small base, broadband penetration in Latin America is taking off. By 2009, TIA projects broadband penetration in Latin America will rise to 12.8%, more than four times the 2.9% total in 2005. In Middle East/Africa, less than 1% of all households have a broadband connection. A market is beginning to emerge in that region; TIA expects penetration to edge up to nearly 3% in 2009.

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