Broadband services

Cable Extends US Broadband Dominance

Even though rival data providers may be grabbing the headlines with gigabit-speed rollouts, cable operators keep steadily increasing their control of the huge US broadband market.

In the latest proof of that trend, the ten largest US cable operators collectively netted close to 2.7 million high-speed data subscribers last year, besting their gains of a year earlier by a healthy 23%, according to fresh figures from the nation's 17 leading broadband providers compiled by the Leichtman Research Group Inc. (LRG) . With this sizable increase, the ten big MSOs boosted their total broadband sub count to about 52 million, giving them a commanding 59.6% share of the overall US broadband market.

Moreover, the top MSOs accounted for a whopping 89% of the broadband subscriber gains in the US market last year, up from an already impressive 82% of the broadband sub gains in 2013, as they widened their lead by 2.3 million customers. The nation's seven biggest telcos accounted for the rest of broadband sub gains as they added more data customers, but saw their combined market share fall further behind cable's share.

The cable industry's continuing broadband successes stand in stark contrast to the industry's lagging performance in the pay-TV arena, where it keeps coughing up market share to the aggressive large telcos and satellite TV operators. In that parallel market, cable's overwhelming market share has now slipped to 51.8%, while the satellite TV providers have boosted their share to a competitive 36.0% and the telcos have raised their share to a respectable 12.2%. (See US Pay-TV Providers Pile Up New Losses.)

For more of Light Reading's coverage of broadband market trends, visit our broadband services content channel.

As has become customary, giant Comcast Corp. (Nasdaq: CMCSA, CMCSK) easily led the way with an impressive pickup of almost 1.3 million high-speed data customers for the year, followed by strong gains of 657,000 subs for Time Warner Cable Inc. (NYSE: TWC) and 432,000 subs for Charter Communications Inc. Among the top ten MSOs, only Cablevision Systems Corp. (NYSE: CVC) suffered a loss of broadband subscribers for the year, shedding 20,000 data customers in the fiercely competitive New York metro market where it faces off against Verizon Communications Inc. (NYSE: VZ)'s FiOS service.

While they continued to pad their broadband subscriber totals as well, the seven largest US phone companies fared worse than they did a year ago. The big telcos collectively picked up 345,000 data customers in 2014, down more than 25% from their take in 2013, as they continued to cope with heavy losses of DSL subs.

Five of the top seven phone providers registered broadband sub gains last year, with Windstream Communications Inc. (Nasdaq: WIN) and FairPoint Communications Inc. both failing to make the grade. Verizon led the group with an increase of 190,000 subscribers, followed by Frontier Communications Corp. (NYSE: FTR) and CenturyLink Inc. (NYSE: CTL) with increases of 108,500 and 91,000, respectively.

Taken together, the 17 service providers now have more than 87.3 million broadband customers. These 17 providers represent about 94% of the nation's broadband market, which includes more than 92 million homes.

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

brooks7 3/9/2015 | 12:27:25 PM
Re: Biz in Broadband? Kb,

Cable has been well ahead of telco for a long time within the US.  It is just true that it was easier (and less costly) to upgrade HFC to DOCSIS than it was to make DSL work.  Because of that, cable grabbed onto an early lead and extended it over time.

Before all the DSL folks get cranky, let me give you the primary issues with DSL as a Broadband Technology (in the US):

- 1/3rd of Homes are Cabinet Fed causing significantly more complicated upgrades.

- Interference withing Binder Groups is pretty widespread (T-1 lines for example)

- Incompatible technologies were deployed (Loop Extenders, Pairgain)

- Lots of older copper has challenges

All of this made it harder to get started with DSL.  This is why Verizon jumped to FiOS.  They realized that the amount of work to make a 100Mb/s+ DSL network was actually more than doing FTTH (I can do the math for you sometime if you want).  In order to save the customers they wanted, they decided to one up the Cable Guys.  The splits on FiOS are much smaller than in Cable.  They can offer much higher rates at no incremental cost whenever they want.  And in doing so, they do not change the amount of CATV bandwidth available on FiOS.

The humor to me is that the bandwidth has actually not been as big a draw as people thought it would be.  Once you get past a group of speed bigots (measuring the size of a body part by what you have), most people just want "the best deal".  So now we are in the mode of trading single digit market share gains.  The general public see the offers are completely equivalent and there has yet to be a way to create additional margin in the offerings.  So the telcos are dumping lines (in a way that they make money) in places that they see Cable as being advantaged.

Nobody will ever say that from a large telco, but that is a bit of truth.


KBode 3/9/2015 | 10:36:48 AM
Re: Biz in Broadband? These are residential. Interesting what an impact AT&T and Verizon's decision to back away from DSL markets they don't want to upgrade is having.
Captain_Packets 3/9/2015 | 7:23:36 AM
Biz in Broadband? Alan - are these broadband gains just residential customers; or do those numbers include on the business side as well?
danielcawrey 3/8/2015 | 1:11:36 PM
Re: The Obvious My big complaint abou these big operators is that the speed of broadband is not accelerating.

Maybe this has to do with the fact that mobile is taking away a lot of the increased infrastructure capacity.

But I would hope that there are some big gains in the coming years for broadband speeds. 
steve q 3/6/2015 | 10:07:33 PM
Re: The Obvious I only see verizon fios to be able to take more form the Comcast is if they lower the price data. With newer 4k and smart tv the best outcome for Verizon is to push a dual service with there 4glte with a high quality Ac router.
mendyk 3/6/2015 | 12:30:44 PM
The Obvious One more time -- these two trends (rising broadband prospects, declining video market share) are a direct result of a strategic decision by cable operators to focus on higher-margin business. It's a mistake to consider these as separate issues. Content providers intent on squeezing even more juice from the lemon are the ones that will face the bigger revenue challenges in this transition. And they'll have themselves to blame for it.
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