17 countries to surpass 60 percent broadband penetration into the home by 2012

Worldwide consumer broadband connections will grow from 323 million connections in 2007 to 499 million in 2012, according to Gartner, Inc. Worldwide consumer broadband connections penetrated 18 percent of households in 2007, and by 2012, households with a broadband connection will reach 25 percent.

Five countries exceeded 60 percent broadband penetration into the home in 2007: Canada, Netherlands, Switzerland, South Korea and Hong Kong. This is expected to grow to 17 countries by 2012 (see table 1).

“Depending on the specific market conditions, availability of Internet-enabled devices and the continued impact of broadband on consumer lifestyles, we expect some markets will have a broadband ceiling at 80 percent penetration or greater,” said Amanda Sabia, principal research analyst at Gartner.

The high penetration rates seen in countries such as South Korea, Hong Kong and the Netherlands demonstrate what is possible under the right conditions. The small, denser countries, or countries with government-backed spending for broadband infrastructure, have an advantage. As a result, by 2012, these countries will have maintained their lead in broadband penetration.

The top three markets of South Korea, the Netherlands and Hong Kong are already heavily penetrated so the change forecast in penetration rates is minimal compared with the increase expected in markets such as the United States (23 percent), Japan (22 percent), Czech Republic, New Zealand and Australia (each with 21 percent). Growth in broadband adoption is dependent on specific market conditions, availability of Internet-enabled devices and the continued impact of broadband on consumer lifestyles.

Emerging markets in Asia Pacific will contribute the greatest increase (59 million) of consumer broadband connections worldwide. This market alone accounts for more than one-third of the five-year growth in consumer broadband connections. China alone will supply 25 percent of the overall growth in worldwide consumer broadband connections. The mature markets of Asia/Pacific and Japan, historically had and will continue to have the highest broadband penetration of households worldwide. As this market is reaching saturation, the growth in the number of connections (18 million) is the lowest among the mature market segment.

“Broadband penetration will increase, especially in the geographically larger markets, as current broadband providers continue to deploy their services, as newer technologies (wireless broadband, such as WiMAX) attract subscribers, and as users experience firsthand how speed enhances their Internet sessions,” Ms. Sabia said.

Table 1: Markets with Highest Household Broadband Penetration, 2007 and 2012 (Percent)

Source: Gartner (July 2008)

When looking at household penetration for emerging versus mature markets, the overall growth is skewed. Not only will the digital divide continue between the emerging and mature markets, it will widen by 13 percentage points.

“Consumers in heavily penetrated markets are already addicted to broadband, thus the future in these markets is less concerned with increasing subscriber numbers, and more with addressing what new applications and/or content will be transmitted over this pipe,” Ms. Sabia said. “Newer ventures in these markets are primarily entertainment (such as Internet video content and games), Internet Protocol television (IPTV) and home networking, which will bring these devices and services into one integrated system within the home.”

Gartner defines mature markets as the United States, Canada, Netherlands, Sweden, United Kingdom, Switzerland, Belgium, Spain, France, Italy, Germany and the rest of Western Europe, South Korea, Hong, Kong, Japan, Australia, Taiwan, Singapore and New Zealand. Gartner defines emerging markets as Malaysia, China, Thailand, Philippines, India, Indonesia, Hungary, Czech Republic, Poland, the rest of Eastern Europe, Latin America, the Middle East and Africa.

Additional information is available in the Gartner report “Dataquest Insight: Consumer Broadband, Global Penetration Rates and Growth Prospects.” This report is available on Gartner’s Web site at http://www.gartner.com/DisplayDocument?ref=g_search&id=723508&subref=simplesearch.

About Gartner

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