China's broadband sector has been growing dramatically at a compound annual growth rate (CAGR) of 79 percent over the last three years. The strong growth will continue to boost the broadband market, which will reach 79 million subscribers by 2007, the Ovum report said.

Ovum's senior analyst Kevin Lee said with a penetration rate of only 3.4 percent of the population now, the potential for growth is huge.

"Broadband penetration in China is well behind many countries in the Asia-Pacific region," he said. "We believe China's broadband development will continue to benefit from a booming economy, growing incomes, expanding PC penetration and new applications such as VoIP and IPTV. The Olympics will provide another boost."

Ovum forecasts for China's broadband will grow by a CAGR of 75 percent to reach 139 million subscribers by 2010.

China Telecom and China Netcom are the dominant providers of broadband access services in China, with a combined broadband market share of 87 percent of subscribers. China Tietong, China Unicom, cable and miscellaneous other operators account for the remainder.