Entries in Broadband Market Share (4)


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. 


2Q11 Connections: Voice, Video and Broadband Market Shares

Cableco Video Market Share Dips Below 50%

Voice market share for the publicly-traded ILECs continued to decline in the second quarter as they shed more than 1.8m subscribers. ILECs are clinging to 22.7% voice market share, having lost 11% of their voice subscribers YoY, while the wireless providers continue to dominate the voice market.

With the growth in data-only wireless connections--due obviously to the popularity of tablets, netbooks and other devices--we decided this quarter to adjust our wireless voice totals in an effort to factor out these non-voice subs. Given that most wireless carriers are still not breaking out non-voice subs, we have estimated this break out based on recent CTIA data and our own communications industry projections.  Despite this adjustment, which we've made for all historical quarters as well, we figure that wireless carriers held onto 72.4% of the voice market in 2Q11. Meanwhile, the cablecos reported the fastest growth for voice customers in the quarter, growing annually at around 12%.

ILECs were the only provider segment to report positive net additions (391k) of video subs in 2Q11, as cablecos shed 470k customers and satellite providers lost 110k subs QoQ. The cablecos’ video market share dipped to under 50% for the first time on record in 2Q11, to 49.9%, while the ILECs video market share rose to 14.2%. 

Overall, total video subscriptions for all three segments fell 187k in the second quarter—a sign that streaming and over-the-top video options are impacting the television landscape. Online video competitor Hulu has stated it will reach 1m paid users by the end of the year, and IMS research predicts the OTT market will grow at a compound annual growth rate of 32% over the next five years.

Cablecos and ILECs combined to gain 600k broadband subscribers in 2Q11, with CATV providers leading the gains with 319k adds.  For the year however, ILECs outpaced the cablecos in terms of broadband expansion—growing at 11.9% annually.  The ILECs hold a slight advantage in market share as well, with 51.5% of the broadband market. Verizon's and AT&T's continued strong results for FiOS and U-verse are fueling the ILECs' market share gains in broadband.


1Q11 Connections: Voice, Video and Broadband Market Shares

ILECs Fastest Growing in Video Market Share

The publicly-traded ILECs continued to lose voice customers at a more than 11% annual rate in 1Q11; ILEC voice customers fell from 120.3m two years ago to 95.7m in 1Q11.  Overall industry access lines fell at an 11.4% pace in 2010, according to JSI Capital Advisors’ recently released annual Phone Lines study.

Cable providers posted the fastest growth for voice customers in the first quarter, gaining 12.1% versus 1Q10, they now serve 19.7m voice customers, though cable’s market share of voice remains a modest 4.5%.  ILEC market share was 22.6% and wireless providers now account for nearly 73% of voice customers--although that figure is undoubtedly skewed by the fact that increasingly, new wireless accounts are for “data-only” customers.  To date, the major wireless carriers aren’t breaking out data-only subs versus voice or combination voice-data customers. 

In the video market, ILECs added 438k new connections in 1Q11, for a 16% annual growth rate. DBS providers added 242k net new video customers while the incumbent cablecos lost 387k.  ILECs now serve nearly 14% of the total video market, compared with 36% for DBS providers and 50% for cablecos.

As noted above, wireless providers aren’t yet breaking out ‘broadband’ connections—although most wireless data service might not be considered broadband, with the exception of nascent 4G efforts. Between the ILECs and cable providers, ILECs are narrowing the gap and accounted for nearly 49% of the broadband market at the end of 1Q11.  ILEC broadband connections increased by 10.5% over the past year, but in the first quarter net adds were just 433k compared with cable’s more than 800k net new broadband customers. 


4Q10 Broadband Market Share

ILECs Win Share in 4Q10

After hovering right around 48% for the past two years, ILECs enjoyed a slight jump in broadband market share in 4Q10.  ILECs added nearly 2.4m broadband connections in the quarter, compared with just 700k net broadband adds for the cable providers. As a result, ILEC market share rose to 49% versus cable’s 51%.  The ILECs grew their broadband subscriber base at a 10.3% pace in 2010, compared with a 5.9% growth rate in cable broadband subs.