Business

Despite barriers, number of connected community homes growing, says In-Stat/MDR

March 4, 2003

March 4, 2003--Developers continue to embrace the idea of using technology as a competitive advantage, and a plethora of providers of all shapes and sizes are moving into the connected community market, contends a new report from In-stat/MDR (Scottsdale, AZ).

The market for connected communities is developing slowly, thanks to a lack of expertise in broadband networks and services on the part of developers, an absence of the services needed to necessitate an advanced Fiber-to-the-Home (FTTH) network, and the traditionally slow build-out of Greenfield communities. That said, developers continue to embrace the idea of using technology as a competitive advantage, and a plethora of providers of all shapes and sizes are moving into the market, contends a new report from In-stat/MDR (Scottsdale, AZ).

Analysts expect strong growth in the number of connected community homes through 2007, with the market experiencing a 45.5 % growth rate in 2003, increasing in 2004 and 2005 as the market recovers and new resources are available to providers in the space.

"The Master Planned Community (MPC) is a unique and interesting arena for broadband services, both in the types of solutions deployed and in the forces driving deployment," contends Amy Cravens, industry analyst with In-Stat/MDR. "Currently, the MPC is at the leading edge of residential broadband services, being a principal market for fiber-to-the-home and triple play services. Developers and providers are realizing compelling business opportunities for broadband enabling these Greenfield communities."

The report also reveals that:

• Service revenues in the MPC will grow from a total of $66.9 million in 2002 to $727.8 million in 2007.
• While FTTH continues to grow in the MPC, cable will remain the dominant technology through 2007--primarily because the cost of FTTH has not fallen as rapidly as had been anticipated, making this solution not as cost effective as cable in many scenarios.
• According to a recent survey of residential developers, almost 75% indicated that at least a percentage of their communities allowed for a broadband connection to every home. These figures indicate that the concept of a connected community is no longer a rarity, but is becoming a standard in new communities.

The report, "Connected Communities: Broadband Services in Master Planned Communities," examines the various last mile networks deployed, service suites delivered, and business models that govern the MPC market. For more information, visit www.instat.com.