With US broadband penetration still growing at a healthy pace and showing no signs of slowing down, cable operators stand poised to further increase their control of the high-speed data market.
Combing through the latest tallies compiled by the Leichtman Research Group Inc. (LRG) and Charter Communications Inc. , the nation's two biggest MSOS, led the way among the biggest cable operators. Although it's the smaller of the two MSOs, Charter actually gained more broadband subscribers than Comcast in the third quarter, beating it by a margin of 58,000 subs (387,000 to 329,000). Thanks to its acquisitions of Time Warner Cable and Bright House Networks earlier this year, Charter is now the second largest broadband provider in the land with 22.2 million subs, having zipped past AT&T Inc. (NYSE: T). Comcast remains the nation's top broadband provider with 24.3 million subs.
All seven of the top MSOs registered broadband subs gains in the summer quarter. Over the past year, the cable companies have added more than 3.5 million data customers.
Once again in contrast, five of the seven leading telcos lost broadband subscribers overall in the third quarter as they focused mainly on upgrading their DSL customers to fiber lines, not bringing on new customers. Only Verizon Communications Inc. (NYSE: VZ) and Cincinnati Bell Inc. (NYSE: CBB) managed to register any gains, while both CenturyLink Inc. (NYSE: CTL) and Frontier Communications Corp. (NYSE: FTR) lost at least 40,000 data customers. Over the past year, the telcos have lost more than 500,000 broadband subs.
Despite the recent aggressive rollouts of gigabit services by AT&T, CenturyLink, Cincinnati Bell and other leading telcos, these trend lines will likely continue in 2017, especially as cable operators rev up their own gigabit rollouts. With the notable exception of Charter, such large MSOs as Comcast, Cox Communications Inc. , Altice , Mediacom Communications Corp. and WideOpenWest Holdings LLC (WOW) all are in the midst of ramping up gig launches throughout their regions with the help of DOCSIS 3.1. (See Mediacom Going All DOCSIS 3.1 by Year-End.)
What's also notable in the latest LRG figures is that the US broadband market just keeps growing, defying earlier predictions that it would soon hit a saturation point. With nearly 92.5 million American households now subscribing to high-speed data services, 81% of all homes have broadband, up from 74% in 2010 and 42% in 2006. At the current growth rate, more than 100 million US homes will subscribe to broadband service by the end of the decade.
— Alan Breznick, Cable/Video Practice Leader, Light Reading