November 12, 2003 3:39 PM PST

Broadband numbers reach all-time high

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Cable and digital subscriber line providers reported their most fruitful quarter ever, adding more than 2 million subscribers to their high-speed Internet services.

During the quarter ended Sept. 30, cable companies accounted for 64 percent of the overall U.S. residential broadband market, while DSL garnered the remaining 36 percent, according to market researcher Leichtman Research Group. DSL added 800,000 subscribers, or 39 percent of new broadband customers, while new cable subscribers made up the remaining 61 percent.

Cable companies and DSL providers, mainly the Baby Bell phone companies, are competing in a market share battle for the millions of households that still use dial-up connections. Since the summer, the Bells have introduced aggressive price discounts in hopes of signing up new customers. Cable companies have responded by boosting their download speeds and toying with price promotions of their own.

"The market was stimulated by nearly every major broadband provider offering aggressive discounts for new subscribers," Bruce Leichtman, president of Leichtman Research Group, said in a statement. "Without these promotions, this level of growth may prove to be difficult to maintain."

DSL providers such as SBC Communications and Verizon Communications have been the most aggressive in introducing price cuts and discounts. The companies recently reported their best quarters for net DSL subscriber additions, which analysts largely attributed to their promotions.

Nevertheless, cable remains the uncontested leader. Companies such as Comcast and Cox Communications also recently reported their best quarter for net additions. However, Time Warner Cable, the nation's second-largest cable network, last month reported slower growth compared to the same period a year ago.

 

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