Broadband Prices Still Too High for Many U.S. Dial-up Consumers, Says Yankee Group

Survey respondents also find the variety of high-speed alternatives indistinguishable

BOSTON - MARCH 23, 2004 The Yankee Group report, "2003 TAF Survey Findings Highlight the

Consumer Market`s Competitive Challenges," finds that U.S. consumers are

struggling to distinguish between high-speed Internet options. While

interest in high-speed services is still growing, dial-up consumers remain

highly price-sensitive. Only 17 percent of consumers say they are likely to

subscribe to broadband at $45 per month.

"Seventy-one percent of Internet customers claim they would switch to

broadband if it were available at a lower price," says Patrick Mahoney,

Yankee Group Consumer Technologies & Services analyst. "Based on these

responses, it appears DSL providers are hitting the vital price point. In

addition, tiered services continue to be attractive to consumers, with 43

percent of dial-up households more likely to subscribe to broadband if they

could choose a lower speed/lower priced package. This next generation of

adopters is less concerned with connection speed than their predecessors

and more interested in cost."

Based on results from the Yankee Group’s Technologically Advanced Family

(TAF) Survey, the report suggests that bundling will prove an effective

strategy for targeting the secondary consumer market for broadband

services.

"Thirty-one percent of broadband households chose their high-speed

providers because of bundled discounts for multiple services. Bundling

allows providers to lower the monthly price of broadband without

sacrificing subscriber profitability because of higher revenue per customer

and lower churn," says Mahoney.

The Yankee Group’s annual TAF survey evaluates attitudes and spending

across key consumer segments. Topics include: media and entertainment

applications, devices, and content; voice/telephony services; home

computing and networking; Internet; and wireless/mobile. The survey

thoroughly examines U.S. consumer perceptions of products and services,

drivers and inhibitors of technology adoption, brand and channel

preferences and loyalty.

CORPORATE CONTACT

Kim Vranas
director of marketing
617-880-0214
kvranas@yankeegroup.com

The Yankee Group (http://www.yankeegroup.com)

The Yankee Group is the global leader in communications & networking

research and consulting. The company helps businesses understand the

opportunities, risks and competitive pressures of developing, deploying and

consuming products and services that drive communication or information

exchange. Now in its fourth decade, the Yankee Group is based in Boston

with offices throughout North America and Europe.