AT&T (NYSE: T) and Verizon (NYSE: VZ) collectively saw strong gains in their next-gen U-verse and FiOS service portfolios, adding a total of 828,000 subscribers during the third quarter. But overall growth in the broadband market has slipped, a Leichtman Research Group study finds.
U-verse and FiOS broadband subscribers now account for 45 percent of the total of 34.9 million telco broadband subscribers, up from 36 percent in Q3 2012. The telcos added about 80,000 subscribers vs. 4,000 in Q3 2012, according to LRG president and principal analyst Bruce Leichtman.
However, the two telcos reported that they lost 798,000 DSL subscribers.
One of the highlights for AT&T during the quarter was that it passed 10 million U-verse subscribers. It attributed much of the growth to its $14 billion Project VIP network upgrade plan. Since launching Project VIP last November, the telco said it has enabled 2.5 million new broadband customer locations.
Verizon also fared well during the quarter, adding 173,000 FiOS Internet subscribers.
Fran Shammo, EVP and CFO of Verizon, said at the Morgan Stanley 13th Annual Technology, Media & Telecom Conference that while it is nearing the end of its FiOS network build out, the telco is seeing positive growth in the markets it currently serves.
"Overall on FiOS we are growing the top line 4 percent year-over-year per quarter and I think that's a sustainable growth rate for us," he said. "We continue to penetrate and gain share in our markets: some of our markets are almost at 50 percent, some markets are maturing, and other markets like New York City are way under penetrated because of how we entered the market and how to build into MDUs and letting cable let us in."
Shammo added that New York City "is now the fastest market we have within in the FiOS footprint."
Despite their positive gains, a new LRG report said that the overall broadband market growth has slipped.
"With top providers now having over 83.6 million subscribers, the broadband industry continues to grow, but at a slightly slower pace than a year ago," said Leichtman. "In the first three quarters of 2013, the top providers added about 1,930,000 subscribers, compared to about 2,150,000 in the first three quarters of 2012."
- see the release
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