U.S. cable MSOs (multi service operators) have a reason to smile as the cable TV industry commands the majority share of the high-speed broadband (Internet) market in the U.S., steering past the telecom industry.
This came as a respite for the cable TV operators who have been gradually losing their foothold in the core video market to fiber-based telecom operators and online video streaming service providers.
Recently, research firm Leichtman Research Group Inc. reported that around 1.2 million high-speed Internet net subscribers were added by both telecom and cable TV operators in the first quarter of 2014. Of this, ten major cable TV operators netted an astounding 970,000 subscribers. This reflects a 21% increase year over year.
At present, the U.S. accounts for approximately 85.5 million high-speed broadband subscribers. Cable TV operators now command about 59% market share (50.3 million Internet customers) while the telecom operators hold the remaining 41% with 35.2 million Internet subscribers.
In the first quarter of 2014, largest cable MSO Comcast Corp. (CMCSA) added a net 383,000 high-speed broadband subscribers which elevated its total Internet base to nearly 21.1 million.
Time Warner Cable Inc. (TWC) added another 283,000 high-speed broadband subscribers which brings its total Internet base to nearly 11.9 million. Moreover, Charter Communications Inc. gained 109,000 high-speed Internet customers, lifting its subscriber base to almost 4.1 million.
Leichtman Research also reported that seven major telecom operators gained 200,000 high-speed broadband subscribers in first-quarter 2014, highlighting a decrease of 57.5% year over year. AT&T Inc. (T) added a net 78,000 (down 37.1% year over year) high-speed Internet subscribers and ended the quarter with around 16.5 million broadband clients.
Verizon Communications Inc. (VZ) gained 16,000 (83.8% year over year) high-speed Internet subscribers and ended the quarter with around 9 million broadband customers.
During the last five years, the internal dynamics of the pay-TV market was shifting from cable TV operators toward fiber-based video offerings of large telecom and satellite TV operators. Moreover, the strong presence of online video streaming providers is posing significant threat to the existing pay-TV business model.
Video offering, the core business area of the cable TV operators, seems to be slipping out of their hands. At this juncture, a strong market share gain in the high-speed broadband segment by the cable MSOs bodes well.
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