A new comScore study on broadband growth in rural, micropolitan and metropolitan areas in the United States finds that broadband has experienced the most significant gains in rural areas during the
past two years.
Rural markets (population less than 10,000) in the U.S. experienced a 16-percentage point increase in broadband penetration from Q2 2007 to Q2 2009, making it the fastest growing
geographic market segment in the nation. Comparatively, micropolitan areas (population between 10,000-50,000) grew 14 percentage points during the same period, while metropolitan areas (population
50,000+) grew 11 percentage points.
Broadband Penetration (% of Homes With
Internet Connection, Total U.S.) |
Geographic Area | Q2 2007
| Q2 2008 | Q2 2009 | Point Change Q2 2009 vs. Q2 2007 |
Metropolitan | 81% | 87% | 92% | 11 |
Micropolitan | 69% | 76% | 83% | 14 |
Rural | 59% | 66% | 75% | 16 |
Source: comScore, Inc., August 2009; Metropolitan defined as area with 50,000+ population, Micropolitan defined as area with 10,000-50,000 population. |
Brian Jurutka, vice president of telecommunications at comScore, notes that "... with low-speed DSL priced at about the same level as dial-up in many areas, there is little
incentive for households to remain on dial-up."
Broadband penetration of 75% in rural markets remains well below the national average of 89%. Lower broadband penetration in rural areas is
compounded by lower Internet usage overall of 63% of all rural households with at least one member access the Internet, compared with 73% of urban households.
The fastest growing local markets
in broadband adoption were all smaller, ranking at or below #50 in terms of size. Ft. Myers - Naples was the fastest growing market with a 12-percentage point increase in broadband penetration from Q1
2008 to Q1 2009.
Fastest Growing Local Markets Based on Broadband Penetration
Growth (Q1 2009 vs. Q1 2008, Total U.S) |
Market | Market Size Rank
| Q1 2008 | Q1 2009 | Point Change Q1 2009 vs. Q1 2008 |
Ft. Myers-Naples | 70 | 76% | 88% | 12 |
Flint-Saginaw-Bay City | 64 | 69% | 80% | 11 |
Louisville | 50 | 68% | 79% | 11 |
Evansville | 99 | 65% | 77% | 11 |
Tri-Cities, TN-VA | 90 | 60% | 70% | 10 |
Source: comScore, Inc., August
2009 |
In comparison, the nation's largest markets are closer to reaching saturation and experienced low single-digit growth.
Broadband Penetration in Largest National Local Markets Based on Market Size of Internet
Households (Q1 2009 vs. Q1 2008, Total U.S.) |
Market | Market Size
Rank | Q1 2008 | Q1 2009 | Point Change Q1 2009 vs. Q1 2008 |
New York | 1 | 94% | 96% | 2 |
Los
Angeles | 2 | 85% | 87% | 2 |
Chicago | 3 | 88% | 92% | 4 |
Philadelphia | 4 | 86% | 89% | 3 |
San Francisco-Oakland-San Jose | 5 | 86% | 89% | 3 |
Source: comScore, Inc |
While large broadband providers such as AT&T and Comcast have a presence in rural areas, smaller and more localized
providers such as Cincinnati Bell, Insight, PenTeleData, Mediacom and Bresnan Communications are proving tough competition in the battle for market share.
And, the Leichtman Research Group
study found that the nineteen largest cable and telephone providers in the US, representing about 93% of the market, acquired 634,000 net additional high-speed Internet subscribers in
the second quarter of 2009. Net broadband additions in the quarter were the fewest of any quarter in the eight years LRG has been tracking the industry.
Other broadband findings for
the quarter include:
- The top phone companies added about 385,000 subscribers, representing 61% of the net broadband additions for the quarter versus the top cable
companies
- Overall, broadband additions in 2Q 2009 amounted to 71% of those in 2Q 2008, with Telcos having 178% as many additions as a year ago, and cable 37% as many adds
as a year ago
- The top broadband providers now account for 69.9 million subscribers - with cable companies having 38 million broadband subscribers, and
telephone companies having about 31.9 million subscribers
- The top cable broadband providers have a 54% share of the overall market
Bruce Leichtman, president and
principal analyst for Leichtman Research Group, Inc., summarizes by saying "The second quarter has proven to be traditionally weak for broadband growth, but with the market becoming more
mature, broadband (additions) further waned in 2Q 2009... In a reverse of last year's second quarter, when cable operators got three-quarters of the net broadband adds, Telcos earned
over 60% of the broadband net adds in 2Q 2009."
Broadband Subscribers (July
1, 2009) |
Broadband Internet | Subscribers at end of 2Q 2009 | Net Adds in 2Q 2009 |
Cable Companies | | |
Comcast | 15,322,000 | 64,000 |
Time Warner | 9,046,000 | 94,000 |
Cox | 4,110,000 | 30,000 |
Charter | 2,957,700 | 10,600 |
Cablevision | 2,503,000 | 18,000 |
Mediacom | 754,000 | 6,000 |
Insight | 481,500 | 3,000 |
Cable ONE | 386,472 | 371 |
RCN | 307,000 | 1,000 |
Other
major private cable companies | 2,137,500 | 22,500 |
Total Top Cable | 38,005,172 | 249,471 |
|
Telephone
Companies | | |
AT&T | 15,548,000 | 112,000 |
Verizon | 9,111,000 | 186,000 |
Qwest | 2,923,000
| 34,000 |
CenturyLink | 2,145,200 | 28,200 |
Windstream | 1,024,600 | 14,900 |
Frontier | 613,810 | 13,763 |
FairPoint | 296,107 | (4,775) |
Cincinnati Bell | 235,400 | 400 |
Total Top Telephone Companies | 31,897,117 | 384,488 |
Total Broadband | 69,902,289 | 633,959 |
Sources: The
Companies and Leichtman Research Group, Inc. |
For additional information about these studies, please visit ComScore here, and the Leichtman Research Group here.