Cable modem/CMTS

Telcos Trump Cable Broadband Gains

U.S. phone companies signed up at least 100,000 more high-speed data subscribers than cable operators during the fourth quarter of 2006, according to the latest research compiled by Cable Digital News.

For the ninth time in the last 11 quarters, the telcos beat their cable counterparts as together the industries added more than 2.5 million subscribers for high-speed Internet service. The nation's largest phone companies added more than 1.3 million broadband subscribers during the quarter, compared to fewer than 1.1 million customers for the biggest MSOs and more than 1.2 million subscribers for all cable operators.

Due to these latest gains, the telcos continue to chip away at the cable industry's broadband market penetration, which once stood above 70 percent. Cable operators still enjoy a healthy lead over the telcos, thanks to their big headstart earlier in the decade.

As the total number of U.S. high-speed data customers surged past 53 million at the end of December, the two rival industries wound up the year with cable companies boasting more than 29.4 million subscribers, or slightly more than 55 percent of the market, and phone companies accounting for about 24.0 million subscribers, or close to 45 percent of the market.

Adding Canada to the mix, the entire North American broadband industry ended the year with somewhere around 59 million subscribers. Cable operators accounted for about 33.5 million customers, while the phone companies accounted for the remaining 25 million or so.

The new CDN figures generally match the latest assessments by other industry analysts of the broadband market. Market analysts see cable's broadband lead steadily slipping as the phone companies keep making strides with cheaper DSL prices, rollouts of new fiber-rich networks, increased multi-product bundling, and other aggressive marketing tactics.

Bruce Leichtman, president and principal analyst of Leichtman Research Group Inc. (LRG) , said the top nine U.S. phone companies added a record 5.5 million broadband subscribers in 2006, up about 230,000 from their 2005 haul. Cable operators didn't do too shabbily either, adding a record 4.75 million cable modem customers, up 275,000 from 2005. But they still fell about 750,000 subs short of the telco total.

On the cable side, the relentless rollout of VOIP service by most major cable operators and the related deployment of discounted triple-play bundles kept powering broadband growth throughout the fall.

Comcast Corp. (Nasdaq: CMCSA, CMCSK), which is rolling out $99 triple-play packages and upgrading several large former Adelphia cable systems around the nation, easily led the way with a pickup of 488,000 cable modem customers. Although down from its huge gain of 536,000 data subscribers in the third quarter, the total is still one of Comcast's highest increases ever.

Time Warner Cable Inc. (NYSE: TWC), which is also promoting $99 triple-play bundles and upgrading old Adelphia systems across the country, followed next with 246,000 new data subscribers. While down slightly from the 251,000 cable modem customers that the MSO signed up in the third quarter, it's up from 229,000 data subs that it registered in the year-earlier period.

Verizon Communications Inc. (NYSE: VZ) scored the highest among the telcos for the fourth straight quarter, adding 409,000 broadband customers, down from 448,000 new customers in the summer and a record 613,000 new subs in the year-ago period. Verizon netted 165,000 FiOS Internet customers in the fourth quarter, boosting its grand total to 687,000, and also added 244,000 DSL subscribers.

AT&T Inc. (NYSE: T) came in second among the telcos with 383,000 new broadband subscribers, up slightly from 380,000 in the third quarter but down from 425,000 in the year-ago period. But AT&T remains the largest telco broadband provider in the land with more than 8.5 million subscribers, followed by Verizon with nearly 7 million.

Look for both industries to experience a weaker first quarter, which is often one of the slowest of the year. But, with the phone companies still undercutting MSO prices by at least $10 a month, broadband subscriber momentum isn't likely to shift back in cable’s favor just yet.

— Alan Breznick, Senior Analyst, Cable Digital News

materialgirl 12/5/2012 | 3:10:30 PM
re: Telcos Trump Cable Broadband Gains Isn't that grand, telcos, with 100 "years of service" and all sorts of Government subsidies (just check your phone bill) cannot match cable cos in broadband access, arguably their core business. Now, while these subsidized slowpokes are catching up in broadband, lets see who wins the market share wars in VoIP and video.

The good news is that with some 110M US TV households and 69M cable households, we have broadband penetration of 53M subscribers, which I assume equates to households. That is about 63% TV household penetration and 77% cable TV household, not bad for a second-rate economy.

Since the number of households too poor to pay $99/mo is probably represented largely by those non-cable households, we might only have 16M more households to go before broadband penetration reaches 100%. After, market share changes become much more painful.
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