Wednesday, July 24, 2024

Telcos Poised for Historic Home Broadband Market Share Gains

At least some observers believe the traditional U.S. home broadband market share pattern could be quite different by 2030, though there might be some disagreement about shares held by various ISPs (cable, telco, independent providers). Historically, U.S. cable operators have held as much as 70-percent share of the home broadband market. But that seems unlikely--perhaps impossible--to sustain.


Perhaps the single biggest change could be a shift of share in favor of telcos, using both the fiber-to-home and wireless platforms. Many observers would not be surprised to see a major telco-cable share of about 40 percent each, with others holding the remaining share.


That 20-percent share would be held by ndependent ISPs and smaller telcos.


Traditionally, U.S. cable operators have held about 65 percent to 70 percent share of the market. By some estimates, telcos collectively have held 20 percent to 30 percent share, with satellite, fixed wireless and independent providers having single-digit shares. 


Most observers expect change, the only disagreement being the degree of share to be lost by cable operators and the share to be gained by telcos and other providers. 

source: GlobalData 


Also, some forecasts that look at technology (optical fiber, hybrid fiber coax, fixed wireless, satellite) often obscure the fact that telcos use both optical fiber, fixed wireless and digital subscriber line technologies. 


So a forecast of 20 percent to 25 percent “telco” market share in 2030 might not include all telco FTTH share or fixed wireless (largely provided by the big telcos T-Mobile, Verizon and AT&T. In principle, telcos might have 35 percent to 45 percent share in 2030, based only on use of fixed wireless, DSL and FTTH shares held by Verizon, T-Mobile and AT&T. Other telcos also will have some share (Lumen Technologies, Frontier, others). 


Provider Category

Estimated Market Share in 2023

Expected Market Share in 2030

Cable Companies (Comcast, Charter, Cox, etc.)

45-50%

35-40%

Major telcos (AT&T, Verizon)

25-30%

20-25%

Satellite Providers (Dish, Viasat)

5-10%

3-5%

Fiber Optic Providers (Google Fiber, Frontier, municipal providers)

5-10%

25-30%

Fixed Wireless Access (FWA) (T-Mobile, Verizon, AT&T)

5-10%

15-20%


The point is that it remains likely that telcos and cable operators will continue to hold most of the share (perhaps 70 percent to 85 percent or more), with independent providers gaining share. 


As capital intensive as fiber to the home remains, independent and smaller providers cannot hope to reach significant portions of the U.S. home broadband market very quickly, especially given the fact that, in most markets, up to 96 percent of existing share is held by the incumbent telco and cable operator. 


Even if one discounts the local telco’s ability to respond to a new fiber overbuilder market entry, the new FTTH provider will often face an incumbent cable operator able to offer gigabit-per-second downstream speeds. 


Provider Type

2023 Market Share

Discussion

Cable

~70%

Among cable operators and wireless companies controlling 96% of the U.S. home broadband market, MSOs (cable companies) accounted for nearly 70% market share

Telco

~26%

Estimated based on cable's 70% share of the 96% controlled by cable and telcos

Other

~4%

Includes independent ISPs, fixed wireless, and other providers


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