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ILECs Growing Video Market Share

3Q11 Connections: Voice, Video and Broadband Market Shares

While wireless providers may be  running away with the market for voice services, ILECs are holding their own against cable providers in the video and broadband arenas—although arguably much of the growth in video in particular may be attributable to the popularity of Verizon’s FiOS and AT&T’s U-verse offerings.

At the end of the third quarter, wireless providers controlled an estimated 73% of the market for voice services, compared with 22.1% for the ILECs. Cable providers grew the fastest in terms of adding voice connections, at 12.2% but nonetheless controlled less than 5% of the market. It’s safe to say that wireless will continue to eat away at the voice market, stealing share largely from the ILECs. Cable providers may be adding voice subscribers, but the bulk of those are low value bundle customers who add the VoIP voice service as part of a bundle at little if any extra cost.

In the video arena, ILECs grew their base by more than 13% over the past year, but market share is still dominated by the cable and DBS providers.  Cable subscriber losses have pushed its market share down to less than 50%, but DBS continues to grow. DirecTV and DISH controlled 36.1% of the market as of quarter end, leaving the ILECs with a 14.5% market share of video connections.

Broadband continues to be an encouraging area for the incumbents, where ILECs grew their base by 4.7% over the past year and control more than 51% of the total market, although in the latest quarter the cable companies did add nearly twice as many connections as the ILECs. 

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