Fiber Internet growth worldwide passes cable

By Peter Svensson

updated 12:52 p.m. ET July 3, 2008

NEW YORK - For the first time, more people around the world are signing up for fiber-optic broadband service than for cable Internet service, according to a British research firm.

Fiber providers added 4.2 million customers in the first quarter, while 2.5 million customers signed up for cable modems, according to a report released Wednesday by Point Topic.

The bulk of the new fiber subscribers are in China, where 2.5 million signed up, for a total of 16.7 million. The United States is in fourth place after Japan and Korea. Point Topic counted 303,000 new U.S. fiber customers, for a total of 2.6 million.

Fiber-optic Internet connections provide faster speeds, but the cost of the buildout is daunting. In deregulated telecommunications markets like those of the U.S. and Western Europe, carriers are unsure if fiber is worth the investment because they are competing there with cheaper technologies like cable and DSL, and it's unclear how much regulators will let them profit.

"It's difficult to persuade operators to make the sort of commitment needed when they can't guarantee their returns," said Oliver Johnson, chief executive of Point Topic. Without government funding, it will be a long time before fiber connections are widespread, he said.

Verizon Communications Inc. is the only major U.S. telecommunications company to pull fiber all the way to subscriber homes. Verizon accounts for slightly more than two-thirds of total U.S. fiber hookups. The rest of the fiber-to-the-home, or FTTH, deployments are by small phone companies and by municipalities.

Cable modems are far more common, at 79.6 million worldwide, according to Point Topic, compared to 42.1 million fiber connections. More than half, or 40.1 million, of all cable subscribers are in the U.S., which has a comparatively extensive cable infrastructure.

Broadband over phone lines remains the most common means of Internet access. Globally, 238.1 million households had DSL, or Digital Subscriber Line, an increase of 9.3 million over the quarter, Point Topic said.

MORE FROM INTERNET

Internet Section Front

As Internet turns 40, barriers threaten growth Parental software is aid, not answer No music video needed for YouTube success Imdb.com allows free film, TV viewing Best Buy to acquire music-sharer Napster Wall Street Journal launches social network Yahoo's home page to get makeover Virginia court strikes down anti-spam law One in five bosses screens applicants' Web lives Facebook gets another facelift Internet Section Front   Add Internet headlines to your news reader: