U.S. cable MSOs (multi service operators) have a reason to smile as a recent report of Leichtman Research Group Inc. (LRG) revealed encouraging data which illustrates cable MSOs’ dominance in the high-speed broadband (Internet) market, steering past the telecom industry.
This comes as a respite at the time when the cable TV operators have been losing foothold in the core video market to fiber-based telecom operators and online video streaming service providers.
For the first-time in the 65-year long history of the cable TV Industry, cable MSOs outpaced telecom operators in the high-speed data market during the second quarter of 2014. Cable MSOs further consolidated their positions in the second half of 2014 as per LRG reports.
According to data compiled by LRG, 17 large cable TV and telecom operators together had approximately 87.3 million high-speed Internet subscribers at the end of 2014, representing about 94% of the nation’s total broadband market. Of the total, cable MSOs command a little over 52 million subscribers (59.6%) while the remaining 35.3 million customers (40.4%) were serviced by telecom operators.
In 2014, 10 major cable TV operators added a net of 2.7 million high-speed Internet subscribers, up 23% year over year. On the other hand, seven major telecom operators added a net 345,000 high-speed data customers, down 25% year over year.
Out of the four large cable TV operators, Comcast Corp. CMCSA gained 1.3 million high-speed Internet subscribers, Time Warner Cable Inc. TWC added 657,000 customers and Charter Communications Inc. CHTR gained 432,000 subscribers. However, Cablevision Systems Corp. CVC lost 20,000 high-speed data customers in 2014.
Over the last six years, the internal dynamics of the U.S. pay-TV industry have been gradually shifting from cable TV offerings toward fiber-based video services of large telecom operators. Moreover, the strong presence of online video streaming providers is posing significant threat to the existing pay-TV business model.
Nevertheless, of late, with the deployment of next-generation DOCSIS 3.0 technology, cable TV operators have extensively penetrated into the high-speed Internet market. At this juncture, a strong momentum in the high-speed data market bodes well for cable MSOs.
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