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WASHINGTON, DC-Apartment complexes targeting younger, technically-oriented tenants would be well-served by investing in broadband services to their multi-dwelling units, according to a newly released study from the Strategis Group. MDUs represent more than a $20 billion market for communications. The group further predicts that nearly 40% of all addressable MDUs, representing nearly 6 million subscribers, will subscribe to some form of high-speed Internet service by 2005.

In its latest study, the DC-based market research and consulting firm projects that high-speed data revenues alone will approach $1.8 billion for MDUs, and the total market for communications services in these units will reach $29 billion. In addition, video on demand revenues will top $770 million for the years spanning 2000-2005 in this market.

Current census data shows that about a third of the population lives in MDUs, says Jason Marcheck, analyst with the Strategis Group and primary author of the study. By the end of 2000, the US will have about 21.5 million MDUs and up to 23.5 million by 2005. While public housing and eldercare facilities, mixed into this group, may not be the best candidates for broadband services, there’s plenty of underserved tech-savvy tenants out there waiting for them.

“In terms of service availability, this is an under-served market,” says Marcheck. “Right now we have a situation where large groups of tech-savvy consumers are living literally right on top of one another. This market represents a tremendous opportunity for service providers.”

The key to tapping into the market is to contract broadband services sooner than later. Depending on the companies owning the MDUs, negotiating contracts could take months for smaller firms upwards to a year or more for larger, more complex agencies. Once the service is in the buildings, though, tenants can be online in a matter of days if not hours.

“While acceptance seems to be there, there is a clear opportunity for providers to offer a suite of services to capture the market share,” Marcheck says.

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