New Market Research Report

Forecasts for Higher Bandwidth Broadband Services

AUSTIN, Texas, December 2004-According to a new report by Technology Futures, Inc. (TFI), by 2006, one-half of U.S. households will subscribe to broadband access, and a shift to much higher data rates in the range of 24 Mb/s to 100 Mb/s will have begun. By 2010, U.S. broadband penetration of 75% is likely, and 10% to 20% of U.S. households will subscribe to very high-speed-broadband. In the process, most of the local exchange carriers current investment in copper cable will be made obsolete.

The new study, "Forecasts for Higher Bandwidth Broadband Services," authored by Lawrence K. Vanston, Ph.D. (President, TFI), Ray L. Hodges (Sr. Consultant, TFI), and Joseph Savage forecasts how bandwidth requirements will increase over time and addresses the applications requiring higher speed. In doing so, it reviews what is happening in South Korea (where broadband penetration already exceeds 70%), Japan, and Italy--current leaders in the migration to higher data rates.

Key findings of the report are listed below.

The research was sponsored by the Telecommunications Technology Forecasting Group (TTFG), a consortium of telephone companies comprised of Bell Canada, BellSouth Telecommunications, Qwest, SBC, Sprint, and Verizon.

According to Dr. Vanston, "Our forecasts for higher bandwidths reflect the general tendency for bandwidth demand to increase along with computing power and memory [see Chart 1]. They also reflect the demand for specific services such as IP video that require more bandwidth. TFI forecasts that 40% of U.S. households will use IP video in 2010 and 20% will demand high definition IP video [see Chart 2]."

Key Findings From This Latest TFI Report:
• Broadband will eventually be adopted by most households as websites become increasingly designed for broadband, e-mail attachments (e.g., photo collections) grow large, and new services such as VoIP become widely adopted.
• U.S. residential broadband will soon demand higher data rates than currently provided, probably in the range of 6-10 Mb/s, which is already available in leading broadband countries.
• In the 2006 timeframe, a shift to much higher data rates in the range of 24 Mb/s to 100 Mb/s is likely to begin. So far, only a few places have access at these rates, notably Japan.
• Leading broadband countries are a full generation ahead of North America. Japan and Korea are already rolling out the subsequent generation of services operating at 20 Mb/s and above, and have plans to complete the transition by 2010.
• There are factors that favored early broadband adoption and rapid broadband progress in the leading countries. However, there is nothing unique about these countries in their need for broadband and faster rates and nothing that indefinitely precludes North America from having it available.
• The results confirm TFI's scenarios for the placement of fiber optics deep into ILEC networks, extending to the home via BPONs, or very close to the home via VDSL technology. In the process, much of ILEC current investment in metallic cable will be made obsolete.

This report would be of interest to:
• Incumbent local exchange carriers
• Competitive LECs
• Interexchange carriers
• Internet service providers
• Telecom equipment manufacturers
• Regulatory personnel
• Depreciation professionals

A table of contents and a list of exhibits follow this press release.

We would be pleased to have this report reviewed by your publication and/or be cited for articles examining the subject matter. Dr. Vanston would also be glad to be interviewed and quoted for articles relating to the subject matter.

Author Lawrence K. Vanston, Ph.D., is an internationally-recognized authority in the use of technology forecasting in the telecom industry. His research reports and forecasts are used and referenced extensively worldwide. Dr. Vanston's views on telecom trends have also been cited in many major publications including "The Wall Street Journal," "Telephony," "America's Network," and "Lightwave."

For 25 years, TFI has helped organizations plan for the future by offering outstanding technology forecasting, strategic planning, trend analysis, and technology market strategies services in high-technology and telecom technologies. Drawing on proven, quantifiable forecasting methods and strategic applications, we combine the vision of the futurist with the down-to-earth judgment of the technologist. Let us be "Your Bridge to the Future."

We are always happy to comment on the subjects of technology and telecom trends. For a list of citations by our staff members, please see "TFI News"

PRESS CONTACT: Please contact Ms. Carrie Vanston at (800) 835-3887, (512) 258-8898, or by email at cvanston@tfi.com with questions about the report and/or to arrange an interview with Dr. Vanston or other technology and telecom experts at TFI.

PURCHASING INFORMATION FOR YOUR READERS: Report details and ordering information is available at http://www.tfi.com/pubs/r/r02004_broadband.html. Readers interested in purchasing a copy may also contact Debra Robison, Technology Futures, Inc. at (800) TEK-FUTR or (512) 258-8898, fax (512) 258-0087, or send email to info@tfi.com. The 47-page report is priced at $495 in North America and $510 elsewhere.

Thank you for your attention.

# # #

December 2004
Technology Futures, Inc.
13740 Research Boulevard, Building C
Austin, TX 78750
(800) 835-3887 or (512) 258-8898
Fax: (512) 258-0087
www.tfi.com

New Telecom Report by Technology Futures, Inc.

"Forecasts for Higher Bandwidth Broadband Services"

Table of Contents

Chapter 1.
Introduction and Summary

Status and Forecast for Broadband Access

Drivers for Higher Bandwidth

Forecast of Households with Very-High-Speed Broadband Access

Network Evolution to Support Very-High-Speed Broadband

Chapter 2.
Forecasts for Broadband Video

Digital TV and High-Definition TV

IP Video

Chapter 3.
Broadband Applications in Precursor Countries

Other Factors in Japan and Korean Broadband Leadership

Chapter 4.
Forecasts of Bandwidth Requirements

Bandwidth Requirements for Video

Overall Bandwidth Requirements

Comparison of IP Video and Broadband Bandwidth Requirements

Chapter 5.
The Deployment of Very-High-Speed Broadband

Options for the Deployment of Very-High-Speed Broadband

Deployment of Very-High-Speed Broadband in Korea

Deployment of Very-High-Speed Broadband in Japan

Network Evolution in North America

List of Exhibits 

1.1 Forecast Broadband Households, Percentage of Households

1.2 Adoption of Various Consumer Communications Products and Services

1.3 Broadband Households in the United States and South Korea

1.4 Forecast of HDTV Households

1.5 Broadband Households by Nominal Data Rate, Percentage of Households

1.6 Trend in Residential Access Data Rates

1.7 Forecast Adoption of Standard and Very-High-Speed Broadband, Percentage of Households

1.8 Comparison of IP Video and 6 Mb/s Broadband Bandwidth Forecasts

1.9 Comparison of High Definition IP Video and 24 Mb/s Broadband Bandwidth Forecasts

1.10 Broadband Minimum Availability 24 Mb/s & Above

1.11 Distribution Fiber Scenarios

1.12 Comparison of the Early Distribution Fiber Scenario and the Required Availability of Very-High-Speed Broadband

1.13 Comparison of the Middle Distribution Fiber Scenario and the Required Availability of Very-High-Speed Broadband

1.14 Comparison of the Late Distribution Fiber Scenario and the Required Availability of Very-High-Speed Broadband

2.1 Subscribers to Direct Broadcast Satellite and Other Digital Competitors

2.2 Subscribers to Cable Telephony, including VoIP

2.3 Subscribers to Digital Cable

2.4 On Demand Television vs. Broadcast Television

2.5 Growth in HDTV Programming Availability in The U. S.

2.6 HDTV Installedled Base in the U.S.

2.7 Forecast of HDTV Households

2.8 Provisional Forecast of U.S. Households using IP Video

2.9 Provisional Forecast of U.S. Households Using High-Definition IP Video

3.1 Effective Broadband Access Costs with Equalized Purchasing Power

4.1 Comparison of IP Video and 6 Mb/s Broadband Bandwidth Forecast

4.2 Comparison of Households with Both HDTV and Broadband and 6 Mb/s Bandwidth Forecasts

4.3 Comparison of High Definition IP Video and 24 Mb/s Bandwidth Forecasts

5.1 Alternative Passive Optical Networks Technologies

5.2 Speed of Broadband Access National Targets

5.3 Added Subscribers by Broadband Access Type in Japan

5.4 Broadband Minimum Availability 24 Mb/s & Above

5.5 Distribution Fiber Scenarios

5.6 Comparison of the Early Distribution Fiber Scenario and the Required Availability of Very-High-Speed Broadband

5.7 Comparison of the Middle Distribution Fiber Scenario and the Required Availability of Very-High-Speed Broadband

5.8 Comparison of the Late Distribution Fiber Scenario and the Required Availability of Very-High-Speed Broadband

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