July 13, 2006, 12:00 AM

More than 3 million broadband subscribers added in the first quarter

Nearly 70% of all U.S. households now subscribe to an online service at home, with high-speed Internet services accounting for about 60% of all online subscribers, according to Leichtman Research Group.

Nearly 70% of all U.S. households now subscribe to an online service at home, with high-speed Internet services accounting for about 60% of all online subscribers, according to new research from Leichtman Research Group.

The 20 largest cable and DSL providers-representing about 94% of the market-added a record 3.06 million subscribers in the first quarter. “The last three quarters have seen record net additions of total broadband subscribers, and the first quarter of 2006 was the best ever for both DSL and cable broadband providers,” said Bruce Leichtman, president and principal analyst.

Overall, cable remains the most common source for residential broadband, driven by its strength among higher-income households. 37% of all households with annual incomes of more than $75,000 subscribe to cable broadband, while 27% subscribe to DSL, Leichtman found.

Among households earning between $30,000 and $75,000 per year, 21% subscribe to DSL and 18% to cable. The mean annual household income of cable broadband subscribers is 12% higher than their DSL counterparts, according to the study. The mean income of broadband subscribers is 35% greater than narrowband/dial-up subscribers.

The study also found that there is growing interest in broadband-40% of current narrowband/dial-up subscribers said they are interested in getting broadband. Other studies have shown that broadband users tend to spend more online than dial-up users.

“The percent of U.S. households that subscribe to an online service is higher than ever, and broadband’s share of the online market continues to grow,” Leichtman said. “By the end of the year 2010, there will be over 105 million residential subscribers in the U.S., with over 80% subscribing to broadband.”

The top five states in residential broadband penetration were Connecticut, New Jersey, Hawaii, Massachusetts and California, according to Leichtman. The bottom five states were Mississippi, South Dakota, North Dakota, Kentucky and Montana.

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