'No Signs of Wireless Substitution' for In-Home Broadband in Q4 – Analyst

US cable ops again took the lion's share of broadband gains in Q4 2018 as new household formation remains the most critical contributor to penetration growth, Craig Moffett says.

Jeff Baumgartner, Senior Editor

March 6, 2019

2 Min Read
'No Signs of Wireless Substitution' for In-Home Broadband in Q4 – Analyst

Despite the recent introduction of speedy, fixed wireless services aimed at disrupting the wired, in-home broadband market, there were "no signs of wireless substitution (either fixed or mobile)," in Q4 2018, MoffettNathanson's Craig Moffett found in his latest analysis of the US broadband sector.Verizon's initial move into four markets with "5G Home," an in-home fixed wireless broadband service delivered on millimeter wave spectrum, has done nothing yet to dent cable's growth. The launch "was far smaller than expected … and it was far too small to have any impact whatsoever on market share in 2018," Moffett noted.Still, Moffett said similar concerns about the threat will linger for MSOs and other wireline ISPs in 2019, "albeit with perhaps a bit more skepticism now" even as Verizon prepares for a more "meaningful expansion" of 5G Home in the latter part of the year.In Q4, US cable operators again "won" the period, as MSOs racked up 841,000 net broadband adds, up 4.9% year-on-year. The telcos lost 145,000 subs, down 1.3%, while satellite broadband service providers added 28,000 net subs, up 9%. When all are rolled up, US broadband providers raked in 724,000 net adds, up 2.9%.Figure 1:Moffett further observed that AT&T's expanding fiber-to-the-premises footprint hasn't swung market share back to the telco (it lost subs in 2018 even as that footprint expanded by 4 million during the year), and the decline of legacy DSL has likewise not starved US cable of broadband growth.Moffett again stressed that contributions from new household formation, rather than straight up sub adds and market share sways, is the key metric to follow with respect to broadband penetration, which stands at about 80% of occupied households in the US. He said broadband growth would have slowed considerably if not for the strength in new household formation, which accounted for about 44% of the industry's 2.7 million net adds in 2018, according to his estimates.Get your strategic roadmap to the technology trends and business cases shaping the cable industry! Join us for the Cable Next-Gen Technologies & Strategies event in Denver on March 12-14. Don't miss this exclusive opportunity to network with and learn from industry experts -- cable operators and communications service providers get in free!He said new household formation growth in Q4 (+1.3%) "continued at levels well above what we have seen in recent years…""The stronger growth in broadband is not somehow tarnished by the fact that it owes to a macro driver like growth in occupied dwelling units. But it is important to understand the source of the industry’s growth," Moffett said.Related posts:

New Household Formation Vital to Cable's Broadband Growth Story in US'Large Number' of Verizon's 5G Home Subs Getting More Than 300 Mbit/sVerizon Appears to Walk Back 5G Home Buildout Goal5G Fixin' to Become 'Largest Existential Threat' to Broadband Providers – Analysts— Jeff Baumgartner, Senior Editor, Light Reading

About the Author(s)

Jeff Baumgartner

Senior Editor, Light Reading

Jeff Baumgartner is a Senior Editor for Light Reading and is responsible for the day-to-day news coverage and analysis of the cable and video sectors. Follow him on X and LinkedIn.

Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.

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