So many broadband providers disappeared after the dot-com boom that casual observers might think broadband itself has met with indifference from Internet users. Nothing could be further from the truth; in fact it has enjoyed striking growth throughout the world over the past three years. This expansion has implications not only for providers of broadband access and content but also for companies beyond the telecommunications and media sectors.

The market is growing strongly

The number of broadband users around the globe rose impressively during the past 36 months. By mid-2002,¹ we estimate, operational broadband networks had a reach of well over 300 million households in the world’s 20 largest economies (Exhibit 1). More than 40 million households and businesses actually subscribed to broadband (Exhibit 2), and more than 100 million people around the world had access to it.² It is actually on track to become one of the fastest-growing technology-based consumer offerings ever in certain markets. In the United States, broadband will likely reach the 25 percent penetration mark more quickly than either PCs or mobile telephones did.³

Active residential lines are spread fairly evenly across the Americas, Asia, and Europe, though only a few...