Recent data from Ipsos Public Affairs found that 37% of online households in the US used dial-up by December 2005, compared to the 61% who used broadband.
The Yankee Group estimates that dial-up will gradually decline through the rest of the decade, accounting for less than 20 million online households by 2009, far less than the 65.7 million broadband households in the US by that time. This means dial-up will represent less than 30% of all households with Internet access. Broadband will gain not only from dial-up's decline, but also attract those users who are new subscribers to Web access.
So why are some dial-up users resisting the tide? According to a new survey from the Yankee Group, the most common reason US consumers don't subscribe to broadband is that it's too expensive. Despite promotional price cuts for DSL (which often cover slower connection speeds and eventually expire, shooting the price up), broadband is more costly than dial-up, especially for truly high speeds. Presumably, dial-up consumers have little need for tasks beyond e-mail, IM and simple Web browsing, which are doable through broadband, and want to keep their monthly expenses low.
Price isn't the only factor. More than 30% of consumers say that they just don't want broadband, and about 14% say they feel dial-up is adequate for their needs. Less than 10% are not able to get broadband access in their area.
As Yankee points out in a recent brief on this subject, this survey demonstrates that there are some ways operators can entice dial-up users to make the switch, mostly involving price. Lowering the price of broadband, or making less costly options available, could convince more stragglers to up their speed. But they face a harder time convincing those who feel that they just don't want it. Bringing these people over requires an educational effort that demonstrates the advantages of high-speed access, a process that could take a while.
To learn more about the US broadband market, read eMarketer's North America Wireless Trends report.