Cable TV has been winning the U.S. internet access “net new subscribers” battle for so long that one might be tempted to argue that telcos have permanently lost the battle.
At least some observers might argue that telcos have permanently lost the internet access market share battle. But one always must be alert for changes. And changes are coming that might allow AT&T and Verizon to start taking more share in internet access, despite a decade of losing share to cable operators.
Others might argue that a rather historic market share reversal now is possible, at least for AT&T.
At a high level, it might appear that Verizon and AT&T still are losing huge chunks of share to cable operators. That is incorrect. CenturyLink, Windstream and Frontier Communications clearly are in that position. But AT&T and Verizon have either begun to gain share, or are stable, and holding share.
Verizon, for example, has been getting some 40 percent share of internet access in its fiber-to-home service areas, and seems to be adding share, incrementally. AT&T actually has been gaining share.
So it is at least conceivable that Verizon and AT&T could begin a long process of retaking market share as their access line inventory moves to gigabit speed ranges, as new platforms are deployed and marketing initiatives add value in the mobility and video areas.
That would represent a huge break from trends over the past decade. Updated platforms are part of the reason for the potential change.
“If you look at our numbers a few years ago we had 15 million DSL and one million high speed broadband,” said John Stephens, AT&T CFO. “Today we've got about 15 million high speed broadband and one million DSL.”
And where ATT is installing fiber to the home (AT&T has about six million FTTH lines in service}, Stephens says AT&T now is getting 30 percent adoption.
Where AT&T has been marketing fiber to the home for two years, it is seeing take rates greater than 50 percent, Stephens said.
AT&T now expects to reach seven million homes passed by its fiber-to-home network by the end of 2017, reaching perhaps 12.5 million locations by the middle of 2019. “By the time we get finished building we will have 14 million” homes passed by FTTH, Stephens says.
New fixed wireless capabilities coming with 5G, plus mobile substitution, are also likely to be new factors able to reshape consumer internet access market shares. All together, the new platforms might reach as many as 50 million U.S. homes.
One always has to be alert for signs that long-established trends are able to change. The consumer internet market share trend might be among those key changes to watch for.