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Cable/Video

Cable Rules Broadband Roost

There seems to be no stopping the cable broadband train in the US.

Despite strong gains for the fiber-enriched services of the two leading telcos, cable operators continue to extend their subscriber lead in the broadband market, according to Leichtman Research Group. In its latest quarterly roundup issued Tuesday, LRG found that the 10 largest US cable providers added about 297,000 high-speed data customers in the second quarter, easily thumping the biggest phone companies again.

The top 10 MSOs did not sign up as many broadband customers in the notoriously weak second quarter as they did last year, when they added 328,000 high-speed data subscribers. But they widened their market lead considerably over the seven largest telcos, which collectively just treaded water in the spring.

As a result, the top 10 MSOs now have almost 47.9 million broadband subscribers, up from 45.7 million a year ago. That gives them a commanding 58 percent market share, up from 57 percent a year earlier.

Moreover, with the steady erosion of the cable industry’s traditional video base, broadband is rapidly emerging as the new core service for cable operators. Indeed, one major US MSO, Charter Communications, has become the first large cable operator to boast more broadband subscribers than video subscribers with its second-quarter results.

In contrast, the top seven US telcos actually lost a collective 2,300 broadband subscribers in the spring. Heavy losses on the DSL front more than offset strong gains on the fiber-enriched front as three of the seven companies sustained overall losses, and only Verizon Communications and Frontier Communications registered notable gains. Still, the slight loss marked an improvement over spring 2012, when the telcos shed more than 70,000 high-speed data users.

Looking at just the top two telcos, AT&T Inc. and Verizon added 802,000 fiber subscribers, thanks to continued steady gains by their respective U-verse and FiOS services. But they lost a combined 818,000 DSL subscribers, with AT&T accounting for the lion’s share.

Further, LRG noted, the telcos reported overall broadband losses for the third spring in the last four years. With nearly 34.9 million data subscribers, they now account for 42 percent of the US broadband market, which now encompasses nearly 83 million households.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

Affordable Cable 8/22/2013 | 12:29:21 PM
Affordable Cable TV I'm a  member of one of those frugal groups, where people share ideas on how to save money. Lots of people are now switching over to Low Income Cable. They provide you with the same basic channels at less than half the cost of Comcast, and Time Warner. It only makes sense. I'm ditching the big guys. They don't give a crap about your business.

 
KBode 8/21/2013 | 3:04:19 PM
And we haven't seen anything yet And we haven't really seen anything yet.

Both Verizon and DSL are backing away from huge swaths of markets they don't want to pay to upgrade, effectively ceding large parts of the fixed-line market to cable over the next decade so they can focus on wireless. So you're going to have markets that are already uncompetitive with one cable operator and a telco that can barely deliver 6 Mbps in many places, to just one cable operator. Surely they won't abuse that dominant position with higher rates, right?

People like to argue this is all ok because of LTE, but at $15 per gigabyte overages in the age of Netflix Super HD, I don't think that argument holds water.

Meanwhile companies like CenturyLink have neither the funds or the competitive pressure to truly deploy next-gen speeds in most of their markets. Cable's dominance of the fixed-line broadband market has really has only just begun.
mendyk 8/21/2013 | 1:18:15 PM
Re: Is DSL a dead duck? Everything starts dying as soon as it's born. I think Norman Vincent Peale said that. He's dead now.
Carol Wilson 8/21/2013 | 1:02:41 PM
Is DSL a dead duck? So can we say that basic DSL -- not VDSL or its variants, I mean - is officially dying?
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