Today’s broadband subscribers care more about price and less about speed than their early-adopter counterparts did, according to a new Forrester Research, Inc. (Nasdaq: FORR) brief. This priority shift by mainstream consumers is a win for DSL providers that consistently offer less expensive broadband packages than cable providers do.
DSL and cable companies continue to compete for customers with different messages. While DSL providers like Verizon and SBC/Yahoo! have chosen to focus on lower pricing, cable operators like Comcast have concentrated their attention on increasing their maximum downstream connection speed to twice that of DSL’s. Although DSL and cable providers have both seen significant subscription growth in the first three quarters of this year — 35 percent and 31 percent, respectively — Forrester’s data shows that today’s and tomorrow’s broadband adopters will lean more toward DSL.
“Mainstream consumers of broadband are more price-sensitive, lower-income, and less technology-optimistic than early adopters of broadband were,” said Jed Kolko, principal analyst at Forrester. “Because the importance of price will only become more pronounced over the next several years, DSL is poised to grab more consumers with price points of $30 per month versus cable¿s $40 to $50 per month.”
Forrester surveyed approximately 6,000 North American households for the “Consumer Broadband” brief series. Upcoming research in the series will focus on three strategies that providers should use to survive the broadband price wars.
Part 2: Focus on retention, not just acquisition.The next brief in the series will examine current subscribers’ intent to switch and suggest the best ways for providers to reduce churn.
Part 3: Offer higher and lower tiers of service.The third brief in the series will look at adoption, awareness, and demand for different tiers of broadband service.
Part 4: Use broadband access as a platform for other services.The final brief in the series will explore consumer demand — and provider strategies — for premium services to offset broadband’s low access fees.
The research mentioned in this press release is available to Forrester WholeView¿ clients and can be found through www.forrester.com.