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By Jo Best, 16 March 2004 15:35

NEWS According to a report from industry organisation the DSL Forum, China is now top when it comes to DSL - outstripping the broadband-savvy Japanese to reach the top spot.

In terms of subscriber numbers, China overtook Japan at the end of last year with nearly 11 million users, while Japan came a close second with 10.2 million, according to research conducted by analyst group Point Topic with the DSL Forum. However, with the largest population in the world - about 1.3 billion in 2003, according to UN figures, it's not exactly surprising to find it has the highest broadband population.

But the figures for number of DSL subscribers per 100 phone lines tell a different story, with China managing just 5.1, Japan ahead with 14.4 and broadband flagship South Korea notching up a whopping 27.7. In terms of percentage growth, China lagged again, with Portugal more than doubling its DSL take-up in the second half of 2003.

China's official news agency, Xinhua, put the huge jump in DSL down to a boom in the Chinese entertainment industry, with users hungry for broadband, film and gaming. Tim Johnson, a principal analyst with Point Topic, favours a combination of factors, including China's desire for industrialisation and to be seen as a high-tech player, as well as providing economic incentives for those going online to go straight to broadband rather than first opting for dial-up.

However, while DSL makes gains in China, Wi-Fi may be set to struggle. Intel, one of the biggest manufacturers of wireless chips, has given the two-fingered salute to the Chinese market after refusing to comply with a Chinese encryption standard that is due to come into effect on 1 June.

Some manufacturers regard the standard as prehistoric and insecure, and Intel has threatened to stop selling its Centrino chips - used by China's most popular laptop maker, Legend - after the June deadline. The Chinese government will only release the protocol to Chinese companies, so if Intel wants to stay in the market, it will have to partner with a local firm.

The overall picture for broadband, however, is looking bright, with almost 28 million DSL lines added worldwide last year to create a grand total of 63.8 million.

And while the UK came in a tenth in terms of DSL subscriber numbers, with 1.8 million, the British shouldn't feel too bad, given that the UK is big on broadband via cable - which is not counted in these figures - and no country bigger than the UK is growing faster than it.

While South Korea often attracts the reputation of a broadband tiger, Johnson believes their strategy could be improved. "From this distance, it doesn't appear they're doing a lot of interesting things - it's traditional internet access but better. It's used a lot for gaming and it's important for schooling, but one doesn't hear of great innovations coming from South Korea. What more can you do with that extra speed? It's not clear."