DSL Growth Skyrocketed In 2004: Report

2004 was a big year for digital subscriber line (DSL) technology, according to Infonetics Research. In the new report, "DSL Aggregation Hardware," the firm found that revenues were up 14% to $1.4 billion in the fourth quarter of 2004, with ports increasing 11% in the third quarter and 9% in the fourth quarter of last year.

The DSL aggregation hardware market's strong finish to the year reflects impressive overall growth last year, with revenues up 8% to more than $5 billion, and ports increasing by 18% over 2003. Alcatel was the market leader in both revenue and ports shipped, with Huawei a distant second. Infonetics expects the number of ports to rise by less than 10% annually through 2008, and revenue growth to slip slightly this year before leveling off.

Increases in aggregation hardware sales were matched by even great customer demand for DSL services in 2004. The DSL subscriber base in the United States grew by 41% last year, reaching close to 17 million, while the global market grew 68% to reach 97 million in the same period. Infonetics expects the number of DSL subscribers worldwide to reach 190 million by 2008.

"North American DSL service providers are provisioning DSL subscribers nearly as fast as their rival MSOs," Inonetics prinbcipal analyst and report author Michael Howard said in a statement. "Pretty soon, the number of DSL subscribers will come close to matching cable broadband subscribers: we expect 30 million DSL and 32 million cable broadband subscribers in North America by 2008. Continued strong growth is expected in large part because VoIP over DSL is no longer clouded with regulated tariff issues now that the FCC has given RBOCs the right not to lease new fiber deployments to the competition."

The largest DSL markets in terms of revenue are Europe, the Middle East and Africa, with a 36% share in 2004 and Asia Pacific with 23%. North America accounted for 23% of revenues in the period. According to Infonetics, revenues from IP DSL access multiplexers (IP DSLAMs) were almost $700 million in 2004, and the firm expects IP DSLAMs to account for 60% of DSLAM revenues by 2008.