The numbers are in and it's official: telco-delivered broadband growth nosedived during Q2 08. According to a tally of the top nine cable operators (Brighthouse Networks, Cable One, Cablevision, Charter, Comcast, Cox, Insight, Mediacom and Time Warner) and the top four incumbent telcos (Qwest, AT&T, Verizon and Embarq), the U.S. cable industry captured four out of five net new broadband subscribers during Q2 08, a sudden surge in success that is almost wholly attributable to a suprising drop in telco broadband gains.
During the quarter, the top cable companies combined added a net 669,375 new broadband customers, fully four times the 155,000 net broadband customers added by the top telcos combined. Cable's share of all the companies' (cable + telco) net broadband customer gains was 81%, up sharply from cable's 56% share of the growth during Q1 08 and only 44% share in Q2 07.
By quarter's end, the cable operators served a collective 34.2 million high-speed customers, while the phone companies served 27.1 million broadband subscribers.
Both cable and phone companies have acknowledged the sudden disparity between cable and telco broadband growth rates. Cable operators say that speed, not price, is the ultimate killer app and DSL just can't compete. It's the new dial-up.
Phone companies say that a weak economy and a marketing pullback hit them harder than expected. It's hard to tell at this stage just what really happened during the quarter, although I tend to think that the telco broadband price war, which started in 2003, has, in fact, played itself out.
Customers who hopped on board for $12.95/month DSL are now frustrated by the speed limitations and don't view low DSL prices as a bargain. Plus, AT&T and Verizon seemed consumed with their high-stakes, higher-margin wireless services during the quarter, to the detriment of double-play and triple-play marketing.
Whatever the case may be, if this disparity keeps up, phone companies could soon actually lose broadband customers.
(Download our handy spreadsheet that details the current and historical broadband subscriber data for the top nine cable companies and top four telcos. The data is free although registration is required.)
Cynthia Brumfield at 2:17 AM|Comments(0)
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