Perhaps it was inevitable that, sooner or later, fixed network broadband would stop growing. But it might come as a surprise that U.S. household adoption of broadband (and even dial-up Internet access) has declined since 2010, according to the Pew Internet and American Life Project. What that means is the issue.
Clearly, Internet access is no longer synonymous with going online with a desktop computer. About 63 percent of U.S. adults use wireless Internet access from a mobile device, notebook PC, tablet or e-book reader. Have we finally reached the point where significant number of users will abandon landline broadband access for mobile access? Or are economic issues the driver of the apparent decline in purchasing of fixed network broadband? Most observers might suggest both processes are at work.
But we now face an interesting question. Most products have a life cycle. Some might say every product, without exception, has a life cycle. You might argue that lower-speed broadband access, using a fixed network, is such a product. Over time, more consumers have switched to higher-speed products. Alternatively, one might argue that broadband access using a fixed network is the product, or that any broadband access, using any network, is the product.
The new issue that no matter which definition is used, it appears that aggregate buying of fixed network broadband has gone into reverse. Whether this is a temporary, cyclical change, or a sign of a fundamental shift, is not clear.
Nor is the issue primarily about “non-buying” activity by some users, though that also is occurring. Some 20 percent of U.S. adults do not buy Internet access services or use the Internet, according to the Pew researchers.
The bigger issue is that it appears fixed-network broadband access now has become a mature product category that possibly has passed the peak of its adoption curve. What follows, when that happens, is a decline, though not always a decline to “zero” or non-use, but a permanently lower level of ownership and usage.
Up to this point, it has been accurate simply to note that broadband access, provided by fixed networks, has been approaching saturation. There have been clear signs that buying momentum has shifted to cable providers and away from telcos. But the overall market still has been growing. Now we have evidence that growth has ended, not simply flattened.
Perhaps just as significantly, mobile Internet access has been a key enabler of Internet usage by users who traditionally have used the Internet less than average, Pew researchers say.
Among smartphone owners, young adults, minorities, those with no college experience, and those with lower household income levels are more likely than other groups to say that their phone is their main source of Internet access. Nor is there a racial divide, Pew reports. Both African Americans and English-speaking Latinos are as likely as “white” American adults to own any sort of mobile phone, and are more likely to use their phones for a wider range of activities.
The study also shows that broadband adoption, at least using fixed line facilities has peaked. In fact, buying of fixed network broadband connections has gone negative since 2010. The reasons why that might have happened aren’t completely clear, though most observers might suggest people now are substituting wireless service for fixed network service, or disconnecting for financial reasons.