3Q11 Connections: ILEC Video and Broadband Penetration of Voice Lines
With access lines still falling and broadband connections growing, the broadband penetration of voice lines continues to expand at a fairly rapid clip. Truth is, we’ll probably need to reverse these measures at some point—that is, measure voice line penetration of broadband connections. But for now, we’ll stick with the traditional view.
At the end of the third quarter, the public ILECs posted average broadband penetration of voice lines of 42.3%, up 270 basis points versus the end of last year, and up 100 basis points in the quarter. The median was 37.1%, up from 35.2% at year end. At the high end, Shenandoah Telecom’s broadband penetration far exceeded 100% due to its cable acquisitions over the past year. In fact, due to the altered business mix at Shentel, we’ll be reclassifying the company as a cable operator in future quarters.
SureWest’s 57.4% penetration was the second strongest in the sample as the company’s aggressive investment in fiber over the past several years has begun to pay off. Also coming in above 50% were Verizon (thanks to FiOS) at 53.8%, Windstream at 51.5% and Warwick Valley Telephone at 51.4%. Verizon’s penetration rate jumped markedly following its sale of 4.8m access lines to Frontier last year. On a positive note, not one company saw declines in its broadband penetration in the quarter, although given that access line counts fell for all but one company (Consolidated Communications), those that held relatively flat in terms of penetration may actually be losing broadband connections.
On the video side of the equation, the overall average penetration of voice lines was 28%, but that was skewed by Shentel’s aforementioned cable acquisitions. The median video penetration level was 13.4% at the end of the third quarter, up from 12.7% at the end of June. Four companies in the sample—Alaska Comm., FairPoint, Hawaiian Telcom and TDS—do not yet offer video services.