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Mobile and Home Broadband - US - April 2011

The introduction of 4G mobile broadband speeds represents another potential game-changer for the intensely competitive consumer broadband industry. Cable operators are under pressure to satisfy the needs of consumers for faster speed and increased mobility, while telephone companies see mobile as an opportunity to regain lost DSL subscribers. Close monitoring of consumer usage patterns will be increasingly important as broadband offerings continue to evolve.

In this exclusive report, Mintel takes a look at trends in the market for home and mobile broadband plans, as well as innovations and consumer attitudes that will shape demand in 2011.

Analysis and insights offered include:

  • Which companies and technologies are gaining subscriber share?
  • What types of internet activities drive the need for speed?
  • How are consumer access methods changing over time?
  • How competitive will 4G mobile broadband be to in-home fixed connections?
  • How many consumers are aware of and willing to pay for 4G?
  • How does speed and reliability of in-home connections compare to mobile?
  • How common are high-bandwidth activities on mobile devices?
  • Why have most consumers not yet subscribed to a mobile internet plan?

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Subscriber data
          • Consumer survey data
            • Advertising
              • Abbreviations and terms
                • Abbreviations
                  • Terms
                  • Executive Summary

                    • Faster wired connections and wireless connections post strong growth
                      • Video streaming, video calling, and remote storage drive need for speed
                        • Laptops and smartphones set stage for mobile broadband growth
                          • Awareness of 4G growing but willingness to pay remains low
                            • Alternatives to in-home broadband plans are limited
                              • Fiber services gain share and challenge cable offerings
                                • Marketing strategies reflect intense competition between technologies
                                  • Verizon leads in positive brand perception
                                    • Under-35s and high earners are more likely users of cable and mobile
                                      • Mobile connectivity is life-changing once adopted
                                        • In-home connections offer better speed and reliability than mobile
                                          • 18-24s are more likely users of high-bandwidth activities
                                            • Perceived lack of necessity most popular reason for nonusage
                                              • Blacks and Hispanics more likely to value mobile access over home connection
                                              • Insights and Opportunities

                                                • Cable companies find a new competitor in 4G LTE
                                                  • Mobile broadband can be marketed more aggressively as a substitute
                                                    • Enhanced offerings for families
                                                    • Inspire Insights

                                                        • Inspire Trend—“FSTR and HYPR”
                                                        • Competitive Context

                                                          • Dial-up and free WiFi hotspots are primary alternatives to broadband
                                                            • Dial-up
                                                              • Figure 1: Usage of dial-up and broadband internet access, 2006, 2008, and 2010
                                                            • Free access
                                                              • Figure 2: Usage of free broadband connections, by age, January 2011
                                                          • Market Size and Segmentation

                                                            • Subscriber growth slows as penetration nears universality
                                                              • Figure 3: Total U.S. fixed broadband connections (over 200 kbps), 2006-10
                                                            • Subscribers switch to faster connections and wireless explodes
                                                              • Figure 4: Total U.S. broadband connections (over 200 kbps), by type, 2009 and 2010
                                                            • DSL loses share while fiber gains
                                                              • Figure 5: Total U.S. fixed broadband connections (over 200 kbps), by technology, 2009 and 2010
                                                          • Market Drivers

                                                            • Broadband usage at home doubled over last five years
                                                              • Figure 6: Usage of cable, DSL, and dial-up internet access, 2005-10
                                                            • Hardware growth sets the stage for mobile broadband adoption
                                                                • Figure 7: Devices used to connect to the internet, 2006, 2008, and 2010
                                                              • Advanced video content and file transfers drive need for speed
                                                                • Streaming video
                                                                  • File transfer
                                                                    • Video calling
                                                                      • Larger households need more bandwidth
                                                                        • Federal subsidy may improve broadband affordability
                                                                        • Leading Providers

                                                                          • Overview
                                                                            • Figure 8: Total number of broadband subscribers at leading providers, 2009-10
                                                                          • Cable companies
                                                                            • Average internet revenues per user roughly equal at each provider
                                                                              • Figure 9: Average high speed data revenues of leading cable companies, 2008-10
                                                                            • Wideband expansion increases marketed top speeds
                                                                              • Clearwire 4G mobile broadband resold under cable brands
                                                                                • Cable operators combine WiFi efforts in NYC
                                                                                  • Telecom companies
                                                                                    • Verizon differentiates with speed in both FiOS and mobile broadband
                                                                                      • Fastest speed in America
                                                                                        • 4G LTE
                                                                                          • AT&T continues to expand but imposes usage caps
                                                                                            • Limitations of U-verse technology
                                                                                              • Usage cap
                                                                                                • CenturyLink acquires Qwest to become third-largest telco
                                                                                                • Innovations and Innovators

                                                                                                  • New broadband network build-outs may change industry economics
                                                                                                    • Wired connection providers extend into home security and automation
                                                                                                    • Marketing Strategies

                                                                                                      • Television advertising
                                                                                                        • Cable companies attack DSL weakness in speed
                                                                                                          • Comcast Xfinity
                                                                                                            • Figure 10: Comcast Xfinity—U-verse napping, television ad, February 2011
                                                                                                          • Cox Internet
                                                                                                            • Figure 11: Cox High Speed Internet—Friend or foe, television ad, November 2010
                                                                                                          • AT&T (U-verse)
                                                                                                            • Figure 12: AT&T High Speed Internet—Speaking from laptop screen, television ad, July 2010
                                                                                                          • AT&T (DSL)
                                                                                                            • Figure 13: AT&T High Speed Internet—Urban stunts, television ad, February 2011
                                                                                                          • 4G mobile broadband providers launch with different approaches
                                                                                                            • Time Warner Cable (TWC)
                                                                                                              • Figure 14: Time Warner Road Runner—G for Gnarly, television ad, September 2010
                                                                                                            • Verizon Wireless
                                                                                                              • Figure 15: Verizon Wireless—4G LTE lightning strikes, television ad, December 2010
                                                                                                            • Online advertising
                                                                                                              • Comcast maintains strong web and Facebook presence
                                                                                                                • Websites educate consumer on 4G
                                                                                                                • Usage

                                                                                                                  • Cable internet becomes most popular form of access
                                                                                                                    • Figure 18: Usage of internet access technologies, 2006, 2008, and 2010
                                                                                                                  • One in six access internet through smartphone
                                                                                                                    • Figure 19: Regularly used means of internet access, January 2011
                                                                                                                  • Under-35s most important target for mobile broadband
                                                                                                                    • Figure 20: Regularly used means of internet access, by age, January 2011
                                                                                                                  • Cable and mobile broadband more likely among higher earners
                                                                                                                    • Figure 21: Regularly used means of internet access, by household income, January 2011
                                                                                                                • Attitudes toward Mobile Internet Connectivity

                                                                                                                  • Mobile connectivity is life-changing once adopted
                                                                                                                    • By gender
                                                                                                                      • Figure 22: Attitudes toward mobile internet connectivity, January 2011
                                                                                                                    • By age
                                                                                                                      • Figure 23: Attitudes toward mobile internet connectivity, by age, January 2011
                                                                                                                    • By children in the household
                                                                                                                      • Figure 24: Attitudes toward mobile internet connectivity, by children in the household, January 2011
                                                                                                                    • Awareness of 4G significant but willingness to pay low
                                                                                                                      • By gender
                                                                                                                        • Figure 25: Attitudes toward 4G mobile technology, by gender, January 2011
                                                                                                                      • By presence of children
                                                                                                                        • Figure 26: Attitudes toward 4G mobile technology, by children in the household, January 2011
                                                                                                                    • In-Home Connections

                                                                                                                      • In-home connections get better marks for speed and reliability
                                                                                                                          • Figure 27: Attitudes toward in-home broadband connections, January 2011
                                                                                                                        • By age
                                                                                                                          • Figure 28: Attitudes toward in-home broadband connections, by age, January 2011
                                                                                                                        • By children in the household
                                                                                                                          • Figure 29: Attitudes toward in-home broadband connections, by children in the household, January 2011
                                                                                                                      • Mobile Phone Connections

                                                                                                                        • Willingness to pay for better mobile phone connections weak despite low satisfaction with speed
                                                                                                                          • By gender
                                                                                                                            • Figure 30: Attitudes toward mobile phone connections, January 2011
                                                                                                                          • By age
                                                                                                                            • Figure 31: Attitudes toward mobile phone connections, by age, January 2011
                                                                                                                          • By household income
                                                                                                                            • Figure 32: Attitudes toward mobile phone connections, by household income, January 2011
                                                                                                                          • A third of respondents interested in using phones as mobile hotspots
                                                                                                                            • Figure 33: Usage of mobile phones to extend internet access, by gender, January 2011
                                                                                                                        • Mobile Broadband Plans

                                                                                                                          • Mobile broadband provides greater speed than cell phones
                                                                                                                              • Figure 34: Attitudes toward mobile broadband plans, January 2011
                                                                                                                          • Mobile Internet Activities

                                                                                                                            • Most common uses of mobile internet are low-bandwidth activities
                                                                                                                              • Video streaming and social networking may drive need for speed
                                                                                                                                  • Figure 35: Mobile internet activities, by device used, January 2011
                                                                                                                                • By gender
                                                                                                                                  • Figure 36: Mobile internet activities, by gender, January 2011
                                                                                                                                • By age
                                                                                                                                  • Figure 37: Mobile internet activities, by age, January 2011
                                                                                                                              • Perceptions of Leading Providers

                                                                                                                                • Verizon leads the pack in positive perception
                                                                                                                                  • By age
                                                                                                                                    • Figure 38: Perceptions of leading broadband providers, by age, January 2011
                                                                                                                                  • By household income
                                                                                                                                    • Figure 39: Perceptions of leading broadband providers, by household income, January 2011
                                                                                                                                • Reasons Not to Have Mobile Internet Access

                                                                                                                                  • Lack of necessity most popular reason for nonusage
                                                                                                                                    • Figure 40: Reasons not to have mobile internet access, by age, January 2011
                                                                                                                                • Impact of Race and Hispanic Origin

                                                                                                                                  • Racial differences in access reflect income disparity
                                                                                                                                    • Figure 41: Regularly used means of internet access, by race and Hispanic origin, January 2011
                                                                                                                                  • Blacks and Hispanics more likely to value mobile access over home connection
                                                                                                                                    • Figure 42: Attitudes toward mobile internet connectivity, by race and Hispanic origin, January 2011
                                                                                                                                • Cluster Analysis

                                                                                                                                    • Cluster 1: Brand-smarties
                                                                                                                                      • Characteristics
                                                                                                                                        • Opportunity
                                                                                                                                          • Cluster 2: Happy cablers
                                                                                                                                            • Characteristics
                                                                                                                                              • Opportunity
                                                                                                                                                • Cluster 3: Brand-unawares
                                                                                                                                                  • Characteristics
                                                                                                                                                    • Opportunity
                                                                                                                                                      • Characteristic tables
                                                                                                                                                        • Figure 43: Mobile and home broadband clusters, Month 2009
                                                                                                                                                        • Figure 44: Regularly used means of internet access, by cluster, January 2011
                                                                                                                                                        • Figure 45: Attitudes toward in-home broadband connections, by cluster, January 2011
                                                                                                                                                        • Figure 46: Popularity of leading broadband providers, by cluster, January 2011
                                                                                                                                                        • Figure 47: Familiarity with leading broadband providers, by cluster, January 2011
                                                                                                                                                      • Demographic tables
                                                                                                                                                        • Figure 48: Home and mobile broadband clusters, by gender, January 2011
                                                                                                                                                        • Figure 49: Home and mobile broadband clusters, by age, January 2011
                                                                                                                                                        • Figure 50: Home and mobile broadband clusters, by household income, January 2011
                                                                                                                                                        • Figure 51: Home and mobile broadband clusters, by race and Hispanic origin, January 2011
                                                                                                                                                      • Cluster methodology
                                                                                                                                                      • Custom Consumer Groups

                                                                                                                                                        • Suburban respondents more likely to subscribe to cable internet
                                                                                                                                                          • Figure 52: Regularly used means of internet access, by type of neighborhood, January 2011
                                                                                                                                                        • Urban respondents more likely than rural to sign up for lowest-cost service
                                                                                                                                                            • Figure 53: Attitudes toward in-home broadband connections, by type of neighborhood, January 2011
                                                                                                                                                          • Rural respondents familiar with 4G more willing to pay for it
                                                                                                                                                              • Figure 54: Attitudes toward 4G mobile technology, by type of neighborhood, January 2011
                                                                                                                                                            • Higher-earning blacks less likely than whites and Hispanics to use cable
                                                                                                                                                              • Figure 55: Regularly used means of internet access, by race/Hispanic origin and household income, January 2011
                                                                                                                                                          • Appendix—Other Useful Consumer Tables

                                                                                                                                                            • By gender
                                                                                                                                                              • Figure 56: Attitudes toward in-home broadband connections, by gender, January 2011
                                                                                                                                                            • By household income
                                                                                                                                                              • Figure 57: Attitudes toward mobile internet connectivity, by household income, January 2011
                                                                                                                                                              • Figure 58: Attitudes toward in-home broadband connections, by household income, January 2011
                                                                                                                                                              • Figure 59: Reasons not to have mobile internet access, by household income, January 2011
                                                                                                                                                          • Appendix—Trade Associations

                                                                                                                                                            Companies Covered

                                                                                                                                                            • Alliance for Telecommunications Industry Solutions (ATIS)
                                                                                                                                                            • Amazon North America
                                                                                                                                                            • AOL
                                                                                                                                                            • AT&T Wireless
                                                                                                                                                            • Barnes & Noble, Inc
                                                                                                                                                            • Cablevision Systems Corporation
                                                                                                                                                            • Cellular Telecommunications and Internet Association (CTIA)
                                                                                                                                                            • Comcast Corporation
                                                                                                                                                            • Consumer Electronics Association
                                                                                                                                                            • Electronic Industries Alliance
                                                                                                                                                            • Facebook, Inc.
                                                                                                                                                            • Federal Communications Commission (FCC)
                                                                                                                                                            • Google, Inc.
                                                                                                                                                            • GSM Association (GSMA)
                                                                                                                                                            • McDonald's U.S.A.
                                                                                                                                                            • National Cable Television Association (NCTA)
                                                                                                                                                            • Netflix, Inc.
                                                                                                                                                            • Pandora Media, Inc.
                                                                                                                                                            • Qwest Communications International Inc.
                                                                                                                                                            • Research In Motion (USA)
                                                                                                                                                            • Rural Cellular Association (RCA)
                                                                                                                                                            • Skype Technologies S.A.
                                                                                                                                                            • Sprint Nextel Corporation
                                                                                                                                                            • Starbucks Corporation
                                                                                                                                                            • Symantec Corporation
                                                                                                                                                            • T-Mobile USA
                                                                                                                                                            • Telecommunications Industry Association (TIA)
                                                                                                                                                            • The DIRECTV Group Inc.
                                                                                                                                                            • The National Cable and Telecommunications Association
                                                                                                                                                            • Time Warner Inc.
                                                                                                                                                            • Twitter, Inc.
                                                                                                                                                            • Verizon Wireless (Cellco)
                                                                                                                                                            • Yahoo! Inc
                                                                                                                                                            • YouTube, Inc.

                                                                                                                                                            Mobile and Home Broadband - US - April 2011

                                                                                                                                                            £3,199.84 (Excl.Tax)