U.S. Fixed Network Internet Access Business Reaching Equilibrium?

The U.S. fixed network internet access business seems to be reaching an equilibrium state, as telco share losses are slowing dramatically.

At the end of the first quarter of  2019, cable TV operators had a 66 percent market share; telcos 34 percent. At the end of the first quarter of 2017, cable share was 63 percent; telco share 37 percent.

Significantly, most of the losses have been at CenturyLink, Frontier and Windstream, not AT&T and Verizon, which have in recent years held their own, not gaining much share but, importantly, not losing share, either.

But losses at CenturyLink, Frontier and Windstream have moderated.

Broadband Providers	Subscribers at end of 1Q 2019	Net Adds in 1Q 2019
Cable Companies
Comcast	27,597,000	375,000
Charter	25,687,000	428,000
Cox*	5,100,000	40,000
Altice	4,155,000	36,900
Mediacom	1,288,000	24,000
WOW (WideOpenWest)	765,900	6,300
Cable ONE	678,385	15,311
Total Top Cable	65,271,285	925,511
Phone Companies
AT&T	15,737,000	36,000
Verizon	6,973,000	12,000
CenturyLink^	4,806,000	(6,000)
Frontier	3,697,000	(38,000)
Windstream	1,032,400	11,400
Consolidated	780,720	1,750
Cincinnati Bell^^	426,700	1,100
Total Top Telco	33,452,820	18,250
Total Top Broadband	98,724,105	943,761

source: Leichtman Research

So the big issue now is whether 5G, mobile or fixed, will disrupt the market equilibrium. And, if so, when that could happen.

“I do think, three to five years out, there is a crossover point where 5G passses home broadband, and 5G has better performance than fiber,” Randall Stephenson, AT&T CEO, has said.

Some will remain skeptical, but Stephenson believes AT&T will have a truly nationwide “fiber speed” network, using either 5G or fiber, across the entire United States.

That would be historically unprecedented. The old monopoly AT&T had a nearly-ubiquitous copper network. But in the post-divestiture market, no tier-one service provider has been able to sell broadband to “nearly every U.S. household” at speeds representing optical fiber performance.

With AT&T, Verizon and also T-Mobile US all planning 5G fixed wireless efforts, the potential for disruption exists. It already appears that some optimistic forecasts of cable TV market share already are falling short. The telco erosion is not completely over. But equilibrium is approaching. Fixed wireless could be quite destabilizing, in that regard.