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
|
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