LONDON, ENGLAND — China has overtaken the U.S. to become the world’s broadband leader, according to a new report from European mobile data watcher Point Topic. The company’s latest research leads it to believe that both China and the U.S. had about 78 million broadband subscribers at the end of August, but China’s subscriber numbers are growing twice as fast as the USA’s.“This is a major milestone for China,” said Point Topic chief executive Oliver Johnson. “Launching people into space is spectacular, but having the biggest broadband market down here on earth means a lot more for building a modern, hi-tech economy.”
When broadband experienced its first legitimate surge in China, some observers predicted the country’s adoption of the medium would overtake the rate in the U.S. by 2006. Then Chinese growth levelled off just as it speeded up in the U.S. For 18 months the two countries were running more or less in parallel, with similar numbers of lines added in each quarter.
The trends diverged sharply in 2008, however. In the U.S., new broadband lines fell from 3.4 million in the last quarter of 2007 to barely 1.1 million in the second quarter of 2008. In China they rose from 3.5 million to 5.0 million in the same period.
By the end of June, Point Topic’s data indicated the U.S. had nearly 76.9 million broadband lines but China was less than 900,000 behind with 76.0 million. The gap was less than the number China added in July alone: 1.14 million according to official Chinese figures.
“We expect Q3 to show some improvement in the US,” Johnson said. “It’s usually better than Q2. And growth in China is likely to fall back a bit. Even so, China is almost certainly going to come out ahead when all the figures are in.
“It’s not so surprising that the U.S. has been overtaken in absolute numbers,” he added. “After all, China has more than three times as many homes and people [as exist in the U.S.]. But the U.S. has also fallen behind the leading European and Asian countries in percentage take-up of broadband.”
That state of affairs embodies serious implications for the competitiveness of the U.S. economy in a high-tech world. The big debate in America today is focused on the immediate economic crisis, but the presidential candidates should take some time to discuss longer-term issues, Johnson suggested.
Regulation is part of the problem with broadband as on Wall Street, he said. Current regulations have allowed incumbent broadband operators to keep the market largely to themselves, leading to higher prices and slower growth. In many countries where there is more open competition, the broadband market has leapt ahead, Johnson revealed.
