In the U.S. market, there is a fairly clear bifurcation between fixed network connectivity providers doing relatively well, and those which are not doing so well, even if an argument can be made that the segment as a whole is challenged.
Tier-one cable operators are generating more revenue and profits from their wireline operations than most telcos are. Large tier-one telcos are doing better than smaller telcos. But AT&T fixed network revenue is slowly declining.
Verizon fixed network revenue also has been declining slowly.
The broader traditional telco market is doing less well, as revenue is dropping.
Cable internet service revenue growth arguably exceeds telco growth, which is flat to negative. And cable revenue from fixed network operations is growing. “Overall, we expect top-line growth of about five percent with weighted average margins improving by about 50 bps to approach 39 percent, S&P Global estimates.
“We believe cable companies can continue to increase high-margin broadband revenue for the next two years through a combination of subscriber growth and higher prices as subscribers demand faster internet speeds with rising data consumption,” says S&P Global. “We expect that the average number of broadband subscribers will increase by about four percent in 2020.”
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