Fixed ISPs lose $10.5B in revenue to cord cutters, analysts find

New research from Parks Associates found the number of broadband cord cutters in the U.S. has risen over the past year, with operators missing out on billions in revenue as a result.

The firm’s latest figures show there are now 13.9 million home internet cord cutters in the country, up from just over 12 million in March 2021. As last year, consumers cited high cost as the primary reason for dropping their fixed service. Parks Associates noted the average monthly cost of home internet, including both standalone and bundled service, is now $116. That compares to a standalone service cost of $64 and a fixed-mobile bundled cost of $128 per month as of June 2021.

Beyond cost, around 50% of consumers said they prefer using the mobile internet or their mobile devices for broadband access as their reason for cutting the cord. Other reasons for cancellation included issues with a former service provider, failure to sign up for service following a recent move, a lack of access to home internet services and low internet usage.

“Consumers overall are increasingly concerned with quality over price; however, older households are concerned about costs,” Kristen Hanich, Director of Research for Parks Associates, said in a statement. “Over 80% of those 65+ cite cost as a factor for canceling their home internet, and almost two-thirds of this age group say that they prefer using their mobile internet.”

All told, Parks Associates estimated cord cutters represent a $10.5 billion missed revenue opportunity for U.S. ISPs.

Still, plenty of other consumers are looking to upgrade their service to gigabit speeds and add on additional services. Parks Associates found half of U.S. internet households currently get at least one additional service from their network provider.

“Consumer intention to upgrade their home internet service remains at an all-time high,” Hanich concluded. “ISPs must elevate their value proposition or risk losing their customers to competitors.”

In its recent Broadband Insights report for Q4 2021, OpenVault found the percentage of customers on a speed tier of 1 Gbps or higher rose to 12.2%, up from 8.5% the year prior.