U.S. cable operators have taken market share in consumer broadband for most of the last two decades. But some analysts believe a new wave of investment in fiber to home facilities will allow telcos to claw back significant amounts of installed base.
Long term, MoffettNathanson sees cable having a 50 percent broadband market share in markets in which they compete with fiber-to-home facilities. That implies a shift of 20 percent of the installed base from current levels.
Not all observers agree with that analysis. S&P Global Market Intelligence, for example, does not expect stepped-up telco FTTH investment to change share statistics very much.
But S&P Global Market Intelligence does believe new competition from mobility suppliers using fixed wireless (T-Mobile, for example) will gain about six percent share of the aU.S. residential broadband market with about 7.19 million subscribers.
It is not yet clear how much of that share gain will be claimed by upstarts in the home broadband market such as T-Mobile, and how much will be gotten by fixed wireless operations conducted by incumbents such as AT&T and Verizon.
The former gains will represent market share gains by telcos, but perhaps some losses for AT&T and Verizon. The latter could increase the installed base held by AT&T and Verizon.
Also, some of that share will be gained by independent wireless internet service providers.
S&P Global Market Intelligence also estimates there will be about 1.52 million satellite customers by the end of 2021, accounting for just one percent of the installed base of home broadband accounts.
Today, cable operators get as much as 85 percent market share when facing telcos using VDSL and 95 percent market share competing against telco DSL facilities, the firm says. Where cable companies compete against telco FTTH, the big telcos have gotten somewhere in the range of 40 percent or slightly-higher share of the installed base. Some smaller telcos manage to get 50 percent of the installed base.
In the first quarter of 2021, the largest U.S. telcos had about 31 percent share of the installed base and got about eight percent market share of net new accounts, according to Leichtman Research.
Mobile market share gains could also be an issue. T-Mobile, for example, expects to gain home broadband share, especially in rural areas, at the same time it gains mobile account share.
Some 15 percent of U.S. adults are mobile only for home broadband, says Pew Research. The point is that telco FTTH competes against cable, other mobile companies, independent ISPs and satellite.
And stranded assets and financial return remain issues for telcos investing in new FTTH facilities. As voice and video entertainment revenue streams have dwindled, the business case for home broadband using FTTH increasingly relies on internet access as the main revenue driver for the FTTH business case.
That is why some see fixed wireless as important. It might be the only way for telcos to compete against cable and other competitors in many geographies.
Always a difficult business decision, the economics arguably have become worse as voice and entertainment revenues dwindle, increasingly making FTTH viable in some urban or suburban locations, not all. Rural deployments rely on subsidies.
Rural customers represent about 40 percent of the entire mobile services marketplace, including 54 million households and about 140 million people, according to T-Mobile. Historically, T-Mobile has been underrepresented in rural markets, compared to AT&T and Verizon.
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