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06:18 PM

China Overtakes U.S. In Number Of Broadband Lines

Broadband for the two countries grew in parallel for 18 months until the first quarter of this year, when China took a leap forward, according to analysts with Point Topic.

China has overtaken the United States as having the largest number of broadband lines in the world, a market research firm said Friday.

As of the end of August, the U.S. and China each had about 78 million high-speed lines, British researcher Point Topic said. But with the number of Chinese lines increasing at twice the rate of the U.S., China has since taken the crown.

"This is a major milestone for China," Oliver Johnson, chief executive of Point Topic, said in a statement. "Launching people into space is spectacular, but having the biggest broadband market down here on earth means a lot more for building a modern, high-tech economy."

China Thursday night launched three astronauts into space. China's third manned space mission in five years is expected to include the country's first attempt at a spacewalk, The New York Times reported.

When broadband use first surged in China, experts predicted the country would overtake the United States in 2006. However, growth in China leveled off, while the U.S. saw a speed up in the number of broadband lines, Point Topic said. Broadband grew in parallel for 18 months until the first quarter of this year, when China took a leap forward.

In the second quarter of this year, the number of new broadband lines in the U.S. fell to barely 1.1 million from 3.4 million in the last quarter of 2007, Point Topic said. Meanwhile, the number of lines in China soared to 5 million from 3.5 million. By the end of June, the U.S. had nearly 76.9 million broadband lines with China less than 900,000 lines behind. The gap was less than the number of lines China added in July alone, 1.14 million, according to China's official figures.

"We expect Q3 to show some improvement in the U.S.," 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."

Given that China has more than three times the homes and people as the U.S., it's not surprising that the country has taken the lead. But what is unexpected is the U.S. falling behind European and Asian countries in the percentage of broadband growth, Point Topic said. The U.S.'s weakening position has "serious implications" for its future competitiveness in a high-tech world.

Point Topic believes U.S.'s problems with broadband growth stems from "light-touch regulation" that allows incumbent operators to keep the broadband market largely to themselves. Less competition has led to higher prices and slower growth. In countries where competition has been more open, the broadband market has leapt ahead, the researcher said.

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