U.S. Cable TV Companies Get 86% of Net High Speed Additions in 1Q 2015

It might be premature to say for certain, but telcos might in the future have lost their status as the primary or dominant fixed network communications service providers, with an awful lot of potential regulatory implications.  

The reason for that potential situation is that in the strategic high speed access category, cable TV companies are taking market share at a very high rate. In the first quarter of 2015, for example, the largest U.S. cable TV companies, accounting for 85 percent of the total U.S. cable TV market, gained  for 86 percent of the net high speed account additions, a pattern that has been in place for many quarters, if not years.

The top cable companies added over 1,000,000 broadband subscribers in the first quarter of 2015.

The top telephone companies, on the other hand, added only about 160,000 net subscribers, despite AT&T and Verizon adding 573,000 subscribers on U-verse and FiOS.

The reason is that the leading telcos are bleeding digital subscriber line accounts. In the first quarter of  2015, the leading telcos lost a net 463,000 DSL subscribers.

The top cable companies now have a 60 percent share of the market for the first time since the second quarter of 2005, Leichtman Research Group says. In other words, despite having an early lead in the broadband market, the cable companies in recent years have been getting most of the net new accounts.

Should the trend continue, cable TV providers will, from this point forward, continue to grow their share, compared to telco suppliers, in part because it is uncertain whether Verizon Communications will compete as hard as AT&T and CenturyLink for higher speed accounts, as networks are upgraded to gigabit speeds.

And none of the telcos are likely to be able to match the cable TV companies in terms of ubiquity of gigabit access. Using the new DOCSIS 3.1 platform, most of the leading cable TV companies can upgrade from perhaps 100 Mbps up to 1,000 Mbps by swapping customer modems and some headend gear.

Cable TV companies will not have to upgrade the access networks. Telcos will have to switch to fiber to home architectures, in addition to making some upgrades of terminal equipment.  

Whether telco fixed network video entertainment services can grow fast enough to make a difference in unclear.

Broadband Internet	Subscribers at End of 1Q 2015	Net Adds in 1Q 2015
Cable Companies
Comcast	22,369,000	407,000
Time Warner	12,581,000	328,000
Charter	5,208,000	136,000
Cablevision	2,767,000	7,000
Suddenlink	1,183,600	34,500
Mediacom	1,041,000	28,000
WOW (WideOpenWest)	722,000	(5,800)
Cable ONE	496,579	8,125
Other Major Private Cable Companies*	6,595,000	60,000
Total Top Cable	52,963,179	1,002,825
Telephone Companies
AT&T	16,097,000	69,000
Verizon	9,246,000	41,000
CenturyLink	6,117,000	35,000
Frontier^	2,359,500	17,000
Windstream	1,132,400	800
FairPoint	318,378	(3,246)
Cincinnati Bell	272,700	2,800
Total Top Telephone Companies	35,542,978	162,354
Total Broadband	88,506,157	1,165,179

source:  Leichtman Research Group