Broadband Demand: Definitions

These broadband demand definitions differentiate local market segments into active, latent, and potential demand. Understanding these market segments and how they can be influenced is foundational to building a business case, or economic case for investing in broadband. Who values broadband and is willing to pay for higher value services is a product of their awareness and experience in using the internet and online business applications. Transforming potential demand to latent demand to active demand is in the interest of broadband providers, economic development agencies, governments at all levels, businesses, and citizens.

grwActive Broadband Demand, or Current Demand
The current subscriptions to broadband services, also known as take rates or adoption rates. This is an indicator for the level at which broadband is currently being used. Please note that even if an end user has a subscription, it does not mean they are using their broadband connection to its full potential – at SNG we call this broadband utilization.

Latent Demand
The new subscriptions that would be fulfilled if better broadband were available. These end-users, or potential subscribers, already know they want better broadband. This market segment is identified through demand aggregation campaigns, signing people up to ‘fiberhoods’, service zones, etc.

Potential Demand
The demand that is nurtured and grown when the value of broadband and online business applications is personalized to end users. Potential demand becomes active demand by raising awareness with citizens and businesses about what they could and should be doing online – this is broadband utilization. Higher levels of utilization drive demand for higher value network services. Accompanying training and technical support is critical, along with incentives, to show technology pragmatists what this technology can do for them, why they should care, helping them use it meaningfully and connect to higher value broadband and online services.

From SNG’s analysis of over 75,000 assessments of broadband utilization by individual businesses organizations and households, potential broadband demand is largest market segment in most network footprints. This represents significant untapped opportunities for local business and workforce growth, diversified economic expansion, and improved community vitality.

How to plan for active, latent, and potential broadband demand are addressed in SNG’s  holistic approach to measuring broadband>>