While their dominance of the US pay TV market is steadily slipping, cable operators are still boosting their command of the potentially more important US broadband market. (See Look Out Below: Pay-TV Posts First Yearly Sub Drop.)
The top 10 US MSOs signed up nearly 2.2 million broadband subscribers last year, according to the latest tally by Leichtman Research Group Inc. (LRG) . While that represents about an 11% drop from the more than 2.4 million high-speed data subscribers that they added in 2012, the total is still more than enough to widen cable's market share lead over the telcos, which have been lagging well behind cable's broadband growth pace for years.
Led by Verizon Communications Inc. (NYSE: VZ) and CenturyLink Inc. (NYSE: CTL), the seven leading US phone companies did perform better on the broadband front than they did in 2012, when heavy DSL subscriber losses by Verizon and AT&T weighed on their results. LRG reports that the seven top telcos netted 477,000 high-speed data customers last year, up substantially from 323,000 in 2012.
The top cable operators finished 2013 with 49.3 million high-speed subscribers, earning them a collective 58.5% share of the cable-telco broadband market. The telcos closed up the year with slightly more than 35 million customers, giving them a collective 42.4% share. The margin between the two industries' market shares has been steadily widening for years as cable operators have rolled out faster and faster download speeds over their DOCSIS 3.0 networks while the telcos have sought to keep up with new fiber builds and extensions.
Befitting its status as the largest broadband provider in the nation, Comcast Corp. (Nasdaq: CMCSA, CMCSK) easily led the way again in 2013, picking up nearly 1.3 million high-speed data subscribers, up more than 70,000 from its 2012 haul. In fact, Comcast, which now has almost 20.7 million broadband customers, accounted for nearly half of the total market gains last year.
In a change from previous years, Charter Communications Inc. signed up the second biggest chunk of broadband subscribers in 2013, beating out No. 2 MSO Time Warner Cable Inc. (NYSE: TWC) and the two biggest telcos. Charter, the fourth biggest US MSO, added 371,000 high-speed data customers in 2013, up about 48,000 from its 2012 gains, as it continued to sign up high-speed data customers in bunches. It closed the year with more than 4.6 million broadband subs, still well behind the four biggest broadband players -- Comcast, AT&T Inc. (NYSE: T), TWC, and Verizon.
Verizon enlisted the third most high-speed data subscribers for the year, as aggressive expansion of its FiOS Internet service outstripped ongoing DSL losses. The second biggest US telco netted 220,000 broadband subscribers for the year, up nearly 100,000 from its customer gains in 2012, to boost its total over the 9 million mark.
TW Cable slumped badly in 2013, adding 217,000 high-speed data subscribers, less than half of its 2012 total. CenturyLink rounded out the year's top five performers, picking up 140,000 broadband customers, down about 50,000 from the year before.
While it's still easily the second largest broadband provider in the US, AT&T suffered through another subpar year. The nation's largest telco added a mere 35,000 broadband subs as its strong U-verse Internet service gains barely more than offset its heavy DSL losses. But AT&T did at least reverse its loss of 37,000 high-speed data customers in 2012.
— Alan Breznick, Cable/Video Practice Leader, Light Reading