Cable operators are taking the US Ethernet market by storm, making strong inroads against the big incumbent telcos as they expand further in the business services arena.
For the first time, large cable providers now account for 20 percent of the total US Ethernet retail port base, according to the latest survey by Vertical Systems Group Inc. While that’s still far less than the commanding 47 percent market share enjoyed by the large telco incumbents, it shows that cable operators are steadily narrowing the gap.
Moreover, cable operators actually installed more new retail Ethernet ports than the big telcos over the first six months of the year. That’s another big first for the US cable sector.
“During this reporting period, the cable MSOs showed very strong market penetration,” said Rick Malone, a principal at Vertical Systems, in a prepared statement. “Competition was heaviest in the mid and small business sectors served by MSOs and regional CLECs, resulting in very favorable pricing for customers.”
Specifically, in its midyear “US Ethernet Leaderboard” rankings, Vertical Systems rated two major MSOs -- Cox Communications Inc. and Time Warner Cable Inc. -- among the top eight Ethernet providers. Cox ranked fifth among providers while TWC ranked seventh.
As usual, AT&T Inc. and Verizon Communications Inc. led the way among providers, ranking first and second on the leaderboard, respectively. The other top four providers included tw telecom, CenturyLink, XO Communications, and Level 3 Communications. To earn a place on the leaderboard, providers must account for at least 4 percent of total “billable retail port installations.”
Another three large MSOs or their business units -- Charter Communications, Comcast Corp., and Cablevision Systems’ Lightpath unit -- made Vertical Systems’ “challenge tier.” To qualify for that tier, a provider must account for at least 1 percent of billable retail port installations.
The latest Vertical Systems results generally gibe with the findings of other industry studies. In the latest Cable Industry Insider report on the subject from our own research arm, Heavy Reading, analyst Steve Koppman found that cable operators now have more than a quarter of the US Ethernet market, and an even greater share of the Metro Ethernet market. Further, the report predicts that cable’s overall Ethernet market share will approach 33 percent as Comcast expands its Metro Ethernet efforts.
We’ll have more on that report and Comcast’s ambitious Ethernet drive in upcoming stories. Stay tuned.
— Alan Breznick, Cable/Video Practice Leader, Light Reading