If all goes well, growth in the digital subscriber line (DSL) equipment market could reach spectacular heights. International Data Corporation reports the worldwide installed base of DSL lines has the potential to jump over 200% compounded annually from 1998 to 2003.
This growth rate would bring the number of lines in service from a mere 70 000 in 1998 to over 27.3 million by 2003. However, IDC warns the market must overcome several barriers.
IDC is represented in SA by BMI-TechKnowledge Group (BMI-T).
"Any leading-edge technology is likely to suffer serious problems, and DSL is no exception," says Brad Baldwin, director for IDC`s Remote Access research programme. "The market must deal with rapidly changing standards, distance barriers, interoperability, installation labour and time, voice and data integration, and competition from cable modems.
"Complicating things further, it also has problems involving governmental regulation. These issues are difficult to forecast, but we do know, if the situation does not improve, it could be the show stopper for DSL rollout."
IDC expects DSL will resolve these barriers, and by 2003, 13 of 100 homes accessing the Internet (13%) will do so using DSL. This is up dramatically from one out of 200, or 0.5%, in 1999. Cable modems will be the major competing technology.
Western Europe will lead the DSL growth onslaught. Its installed base will soar at a rate near 300%. Its share of the worldwide installed base will jump from just under 6% in 1999 to more than 34% by 2003. During that same period, the US share will diminish from more than 78% to 46%.
"The decline of U.S. share indicates DSL expectations are not simply confined to the US," Baldwin says. "European growth will be fuelled by a migration of conversion of ISDN lines to DSL beginning in late 2001. Once this migration begins, it will proceed at an explosive pace."
Telkom is currently testing ASDL in SA. It is expected to be launched at some point in 2000. "Critical to its success will be pricing", argues BMI-T Internet analyst Neil Lightfoot. "This is one of the key reasons for the current ISDN low penetration of the South African market," he adds.
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International Data Corporation (IDC)
BMI-T has established a long-standing business relationship with the International Data Corporation (IDC). With research centres in over 40 countries and more than 500 research analysts and 3 900 clients worldwide, IDC provides a global market perspective on IT market and technology trends.
As the exclusive South African partner of IDC, BMI-T has instant access to IDC`s formidable knowledge base and consulting skills, and is positioned to offer African clients access to the full range of IDC `s global research.
For more information on IDC products and services, please visit IDCSA on http://www.info@bmi-t.co.za.
BMI-TechKnowledge Group (BMI-T)
BMI-TechKnowledge (BMI-T) is Africa `s leading supplier of market intelligence and knowledge-based consulting in the areas of IT, telecommunications and broadcasting.
Formed over fourteen years ago, BMI-T provides its clients with an unmatched and comprehensive range of unbiased market knowledge. BMI-T conducts more than 20 000 market research business-to-business and business-to-consumer interviews and more than 100 focus group projects every year.
BMI-T has an active ongoing research publications business that has consistently published research-based market analysis covering many facets of the IT, telecommunications and emerging media sectors. This knowledge base provides the platform on which we build our customised research and consulting, including assignments such as market entry strategies, product entry strategies, channel and distribution analysis and African research.