According to new research from Strategy Analytics, Comcast (NASDAQ: CMCSA), Time Warner Cable (NYSE: TWC) and other cable operators are outpacing AT&T (NYSE: T), Verizon (NYSE: VZ) and other telco providers in the accumulation of new broadband Internet subscribers. The firm said that during the past twelve months, Comcast and Time Warner Cable accounted for 71 percent of the 3 million Americans who have signed up for broadband Internet service during the period.
"Cable operators continue to increase market share in U.S. broadband," said Jason Blackwell, director of the Service Provider Strategies service at Strategy Analytics. "Over the past twelve months, Comcast has accounted for 42 percent of new subscribers among the operators that we track. Fiber growth is still strong, but the Telco operators haven't been able to shake off the losses of DSL subscribers. In 2016, we expect to see a real battle in broadband, as cable operators begin to roll out DOCSIS 3.1 for even higher speed offers, placing additional pressure on telcos."
Indeed, in the third quarter Comcast and Time Warner Cable added a combined total of 552,000 new broadband Internet subscribers. Those results far outpaced the 106,000 Internet subscribers AT&T lost during the quarter, and the 2,000 customers Verizon added during the quarter.
Other analyst firms largely agreed with Strategy Analytics' conclusions. "Broadband subscriber bases are still growing, with higher contributions from most of the cable operators vs. the prior year. The industry added ~760k broadband subs, slightly lower than the ~800k added in 3Q14," said the analysts at Evercore in a note to investors following the close of the third-quarter reporting season. "Cable, with a superior broadband product, gained ~40bps of market share in the quarter and accounted for ~116% of the industry's broadband additions. No major cable operator lost broadband subscribers. We estimate that the Telcos lost ~110k net broadband subs (fiber gains and DSL losses) in 3Q15, with AT&T losing -106k subs and Verizon adding only +2k subs."
In a recent report, Leichtman Research Group also reported similar findings. The firm said that traditional ILECs lost nearly 140,000 subscribers in the third quarter, a reversal of the 110,000 gain it saw in the third quarter of 2014. At the top of the firm's list were AT&T and Verizon. These two telcos collectively added a total of 305,000 U-verse and FiOS broadband subscribers, but lost 432,000 DSL subscribers.
The results are noteworthy considering AT&T has promised to expand its fiber network to millions of additional locations, while Verizon has said that its own fiber buildout is largely complete. The fiber networks allow the carriers to offer 1 Gbps services.
Meantime, cable operators including Comcast, TWC and others are widely expanded to upgrade their own HFC-based networks to the faster DOCSIS 3.1 standard. That technology will allow cable operators to directly compete with their fiber-based telco rivals by offering 1 Gbps speeds and higher.
- see this Strategy Analytics release
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