U.S. broadband growth slows

WASHINGTON: U.S. telephone and cable companies saw the growth of high-speed Internet services slow in the second quarter to the lowest rate in a year, an industry research firm said.

While broadband growth typically slumps in the second quarter as college students disconnect for summer break, analysts have said overall sales of high-speed Internet connections were less than expected.

"There are now close to 30 million households with broadband, and that's a pretty robust number," said Bruce Leichtman, president and principal analyst for Leichtman Research. "It's not that the market is saturated, but clearly we've gone well past the low-hanging fruit."

According to Leichtman, the 20 largest U.S. broadband carriers added 1.7 million subscribers during the second quarter, the lowest total in a year. The 20 largest companies now have 28.6 million high-speed Internet users and account for about 95 percent of the market.

The nine largest phone companies added 895,336 broadband customers, while the top 11 cable companies added 830,791 broadband customers, their lowest total since the fourth quarter of 2001.

Telephone and cable companies have been pushing broadband services as a lucrative growth business and a way to hold onto customers who would otherwise switch their phone or television service to competitors. Executives from several companies said over the past few weeks they expected the growth of broadband services to pick up in the second half of the year.

The dominant local phone companies and large cable companies such as Comcast Corp. have also added offers of higher download speeds as a way to grow revenues and retain customers.