MDU PENETRATION RATES

The fundamental failing, to date, is the inability for these providers to attain the solid penetration rates that are the basis of the model. The MDU market is based on broad penetration and numerous subscribers, compared to the commercial markets where subscription fees are multifold residential rates . The low-cost/high-volume method is proving to be the best model across all residential broadband markets as higher priced models are proving unfavorable.
However, because of the low per-subscriber fee, it is critical for MDU providers to have a mass audience to generate acceptable revenue. This requires, in the in-building model, strong penetration rates within the property, which were not achieved. The MDU model requires penetration rates in large properties of at least 20 percent, yet the current average looms around five percent. Because providers have not captured the subscriber base anticipated, they are searching for additional means to bring them to profitability.