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LONDON: China will overtake the US to become the world's biggest broadband market, in less than a year. China's broadband sector has been growing dramatically at a compound annual growth rate (CAGR) of 79 per cent, over the last three years. The strong growth will continue to boost the broadband market, which will reach 79 million subscribers by 2007, according to Ovum, the analyst and consulting company.

But the growth opportunity is still huge. With a penetration rate of only 3.4 per cent of the population, broadband penetration in China is well behind many countries in the Asia-Pacific region.

Ovum forecasts for China's broadband will grow by a CAGR of 75 per cent to reach 139 million subscribers by 2010.

Kevin Lee, senior analyst, Ovum, said, "We believe China's broadband development will continue to benefit from a booming economy, growing incomes, expanding PC penetration and new applications such as VoIP and IPTV. The Olympics will provide another boost."

China Telecom and China Netcom are the dominant providers of broadband access services in China, with a combined broadband market share of 87 per cent of subscribers.

Ovum forecasts that prospects for further broadband development in China are bright, but significant uncertainties remain. "China needs to restructure the telecoms industry and it needs to reform the regulatory policy for broadband and IPTV. The possible entry of foreign players in line with WTO commitments could also complicate the development of the competitive situation", says Kevin.

Compared to China, India is lagging far behind in terms of broadband connectivity. The number of broadband subscribers in India crossed 13.1 lakh as of March 31, 2006, and each month the numbers are increasing by over one lakh. Yet, this figure is way below the target set by the Broadband Policy 2004: 30 lakh subscribers by the end of 2005.