Broadband Services Market

Market Overview

The global broadband services market size was valued at USD 420.69 billion in 2022. It is estimated to reach USD 898.71 billion by 2031, growing at a CAGR of 8.8% during the forecast period (2023–2031).

Broadband is a high-speed internet connection technology that transfers data, voice, and video over vast distances. There are several ways broadband differs from dial-up internet access, including faster data transfer speed, high-quality internet services, and accessibility of broadband. There is no need to reconnect whenever one wants to use the Internet, and it does not obstruct phone lines. Broadband services come in many different forms, including digital subscriber lines (DSL), cable modems, fiber, wireless, and broadband via powerlines. The fastest and most reliable broadband options are those using fiber optics.

The working varies according to the kind of broadband service the customer uses. The Internet service provider (ISP) performs this duty primarily by providing online services and tools to homes and businesses. Increased bandwidth, strong signal, wide bandwidth, symmetric speed, and interference resistance are all features of broadband services. The telecom sector, the educational sector, the IT sector, the healthcare sector, and all e-commerce platforms mostly utilize them. They also have a wide range of marine, aerospace, and defense uses.

Highlights

• Fiber optic dominates the fiber broadband connection segment.
• Business dominates thenetwork end-user segment.
• Asia-Pacific is the highest shareholder in the global market.

Market Dynamics

Global Broadband Services Market Drivers

Rising Internet Penetration Worldwide and the Need for Higher Bandwidth‌

The world has witnessed a significant increase in internet service subscribers over the past few years. These internet services include fixed broadband, Wi-Fi, and mobile (3G, 4G, LTE) networking. The rising number of Internet users is attributable to various factors, including infrastructure development, smartphone penetration, and reduced Internet service prices. According to Cisco Systems, Inc., nearly two-thirds of the world population will have internet access by 2023. Similarly, the total number of internet users is projected to increase from 3.9 billion in 2018 to 5.3 billion by 2023, with a compound annual growth rate (CAGR) of 6% between 2018 and 2023.

Additionally, the increasing penetration of internet services worldwide has paved the way for an increased bandwidth requirement. Growing cloud-based applications and surging demand for audio-video streaming and Video-on-Demand (VoD) services further drive this requirement. Therefore, numerous internet service providers invest in building fiber optic infrastructure in their regions because of the consumer sector's high bandwidth needs. Such factors drive the global market.

Rising Adoption of IoT Devices‌

The Internet of Things (IoT) is a network of connected devices integrated with sensors, network connectivity, software, and requisite electronics that enable them to collect and exchange information. The interconnected devices can remotely control and manage several tasks and functions and are crucial for implementing automated business processes across different industry verticals. In 2018, there were approximately 7 billion active IoT devices worldwide. With the expansion of the IT industry, the number is expected to surpass 10 billion by 2020 and reach 20 billion by 2027.

On the other hand, the rising adoption of IoT technology across different industry verticals has led to increased data traffic. The ever-growing demand for efficiently managing voluminous information has led to the need for a fast and uninterrupted data connection. Moreover, IoT technology is anticipated to find wide uses in applications such as autonomous cars and robotic surgeries, where any data latency can cause serious impacts on life and safety. Such factors drive market growth.

Global Broadband Services Market Restraint

High Cost Involved in the Deployment of Network Services‌

Fiber optic cable's high price constrains broadband internet service demand. The newest fiber optics technology provides customers with reliable internet services and symmetrical speed options. Compared to other internet services, the cost of fiber optic broadband services is higher due to the installation of copper or cable. It can be difficult to estimate the cost of installing fiber optic lines for each building.

According to the Federal Communications Commission (FCC), the minimum cost per user for fiber optic deployment should be USD 5000. The services offered by broadband entities primarily affect how much the price varies. The fiber optic connection offers quick and symmetrical speeds, but installation and upkeep costs have become a major barrier for broadband internet service providers.

Global Broadband Services Market Opportunities

New Business Avenues in Cloud Computing‌‌‌

The advent of 5G technology is expected to provide growth avenues for businesses across various industry verticals. Artificial Intelligence (AI) and IoT use across different business processes are expected to gain momentum with implementing 5G services, offering growth opportunities for all stakeholders across the ecosystem. For instance, in May 2019, Vodafone Group Plc. and IBM Corporation announced a collaboration under which Vodafone Group would leverage IBM's Hybrid and Multi-cloud analytics and AI security capabilities to develop an open, agile, and secure IT environment. In addition, the companies would carry out joint initiatives in AI and IoT.

Additionally, high costs in establishing and maintaining on-premises systems have compelled organizations to shift toward cloud computing, requiring improved network connectivity. Combining cloud technologies and 5G services is anticipated to enhance various industries' flexibility, operational capacity, and functionality and enable network carriers to offer unique competitive services. Moreover, they are expected to pave the way for several investment opportunities for cloud businesses. High-speed data connectivity and reduced latency levels offered by 5G network services would encourage broadband service to shift toward cloud-based solutions.

Regional Analysis

Asia-Pacific Dominates the Global Market

Based on region, the global broadband services market is bifurcated into North America, Europe, Asia-Pacific, South America, and the Middle East and Africa.

Asia-Pacific is the most significant global broadband services market shareholder and is anticipated to exhibit a CAGR of 13.6% during the forecast period. The Asia-Pacific region dominated the market due to its accessibility, technological advancements, and proactive government initiatives. Rapid urbanization, industrialization, and infrastructural growth in the information technology and telecommunications sectors occur throughout the Asia-Pacific. The need for high-speed and continuous broadband services is developing due to the expanding desire among major and small company organizations to adopt the most recent digital technology. A large number of homes and SMEs present in the region spur market growth.

Additionally, the region's fast-expanding internet user base and the rising popularity of online learning and entertainment have propelled the market's expansion. The affordability of data in a developing market like India is greatly increasing the demand for broadband services across the country. Moreover, the region's growing middle class, increase in disposable money, and improved quality of living are the main drivers of demand for broadband services. Likewise, the presence of numerous large telecom firms in the area, combined with increased investments in the construction of IT and telecom infrastructure, is anticipated to fuel the expansion of the Asia Pacific market. The greater penetration of various digital enterprises is thought to make Asia the region with the most opportunity.

Europe is estimated to exhibit a CAGR of 6.6% over the forecast period. Europe is projected to experience substantial expansion over the forecast period. The market in the European region has grown due to the rising presence of SMEs and the higher adoption rate of digital technologies by homes and enterprises. The demand for broadband services in Europe has been driven by the increased use of the newest technology across the BFSI, retail, and healthcare sectors. In addition, the manufacturing sector's increased use of automation and digital technology has raised the demand for broadband services in recent years. It is anticipated that well-developed telecommunications and IT infrastructure will support the 5G technologies' rising popularity over the forecast period.

Furthermore, the European Commission (EC) reported that nearly 96.7% of European households can access fixed broadband services. The European Commission (EC) has ambitious plans to make the region a "gigabit society" by 2025. In addition, the Broadband Coverage in Europe study was designed to track the progress of the Digital Agenda for Europe's specified broadband coverage objectives: "Broadband adoption by at least 50 percent of homes with at least 100 megabits per second of speed by 2020" and "Universal Broadband Coverage with speeds of at least 30 megabits per second by 2020." Such factors are estimated to boost regional market growth.

Segmental Analysis

The global broadband services market is segmented by fiber broadband connection and network end-user.

Based on fiber broadband connection, the global market is segmented into fiber optic, wireless, satellite, cable, and digital subscriber line (DSL). 

The fiber optic segment owns the highest market share and is predicted to exhibit a CAGR of 7.2% during the forecast period. Fiber optics or optical fiber can transmit superior-quality signals directly from operators to consumers. It consists of cables of glass fiber connected to the home, i.e., fiber to the home (FTTH), fiber to the building (FTTB), or fiber to the Cabinet (FTTC). It allows transmission rates of 100 Gbps within 10 to 60 km. Fiber optics transmit data through photons, or light particles, that pulsate through a fiber optic cable. Fibre optics offer high transmission rates and symmetry levels, low internet susceptibility, and zero power drop at large distances. It is also widely employed in telecommunication services like the Internet, television, and telephones.

For instance, Verizon and Google employ fiber optics in their Verizon FIOS and Google Fiber services to provide consumers with gigabit internet speeds. Due to their superiority over copper cables, fiber optic cables are widely utilized. In addition, the ongoing technological advancements and the ability to tailor bandwidth to individual user needs significantly increase the demand for fiber optics among users. Fiber optics has recently acquired popularity among consumers due to its high speed and low cost.

Wireless broadband connection is anticipated to be the most lucrative segment during the forecast period. This results from the increased convenience and effectiveness of wireless broadband services. It also saves money for businesses by not necessitating the installation of costly wires. Unlike other broadband connections, wireless services use radio waves or Wireless Fidelity (Wi-Fi) instead of cables. The demand for and use of wireless broadband services has grown due to the quick transition of mobile wireless services from 3G to 4G and the introduction of 5G technology. In terms of revenue, the wireless segment is anticipated to surpass the fiber optic segment during the forecast period.

Based on network end-user, the global market is bifurcated into businesses, households, and others. 

The business segment dominates the global market and is projected to exhibit a CAGR of 8.1% over the forecast period. Most businesses need a reliable, quick internet connection to engage with clients, partners, and staff internally and internationally. The desire for broadband services connects with almost all facets of modern company models, such as marketing and sales, client involvement, and profit analysis. The applicability of broadband services across all industrial verticals has also been improved by the digital channelization of most business models in unison with the global digital revolution. Broadband services are in high demand due to the increased demand for rapid and reliable Internet connectivity among business organizations.

Virtually all business models include marketing, sales, client encounters, and customer service solutions that require internet connectivity 24 hours a day, seven days a week. This has aided the expansion of this market segment over the past few decades. Moreover, as businesses increasingly incorporate cutting-edge technologies such as AI and IoT, the demand for broadband services is anticipated to increase significantly over the forecast period.

The household segment growth is primarily attributable to the growing popularity of home improvement and smart devices, such as smart televisions. Schools, colleges, and universities are rapidly adopting digital education, necessitating a dependable internet connection, as a result of which online education is rapidly acquiring momentum. In addition, the rising trend of work-from-home practices, which has seen a sharp increase due to COVID-19's restrictions, has facilitated the widespread implementation of internet services in the residential sector. In addition, the rising number of subscribers to various OTT platforms and similar entertainment services is anticipated to fuel the expansion of this market segment.

Recent Developments

• June 2023- OneWeb Network announced its plans to launch space broadband service in India by September 2023. OneWeb, headquartered in the United Kingdom, intends to use the entire 'Ka' spectrum band (27.5-29.1 GHz and 29.5-30 GHz) to operate its two data centers and the 'Ku' band (14 GHz) for its satellite user access terminals (UATs) in India.
• June 2023- EE announced its plans to introduce Full Fibre 1.6 Gbps, the fastest broadband service available, backed by its exemplary mobile network. The company introduces various enhanced broadband services for the household, including advanced hardware and Wi-Fi controls.