DSL Beating Cable in U.S. Head-to-Head

In a March 23 report ('4Q Wrap-Up: Connecting the Pixels') Banc of America Securities cable industry analyst Doug Shapiro shared a generally favorable view of the position of U.S. MSOs versus satellite and telcos. However, he uncovered a chink in cable's armor when it comes to broadband Internet access. While MSOs continue to capture slightly more than 50% of broadband Internet subscriber additions compared to DSL, this is only due to cable's larger marketing footprint. Shapiro notes that in the U.S., cable 'enjoys a roughly 30% footprint advantage' compared to DSL. As a result, MSOs essentially have no competition for that 30% segment of the market. What about where MSOs and telcos are fighting head-to-head? 'The Bells seem to be beating cable where they both compete,' Shapiro concludes. However, he expects 'cable to retain a considerable footprint advantage indefinitely' and as a result 'cable/DSL net add market share will remain near the current 50/50 level.'

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