Entries in CATV Voice Penetration (4)


More Than 80% of Basic Cable Subs Take Broadband Service Too

3Q11 Connections: CATV Penetration of Basic Subs and Homes Passed

Cable providers may be losing video connections, much like ILECs are losing their legacy voice lines, but they are steadily improving their penetration of voice and broadband services. At the end of the day, virtually all providers—cable and ILEC—are offering triple-play bundles and providing customers with monthly net savings to buy all services. So where historically the cable provider and the ILEC would share the customers in a given market, today it’s a full-blown market share war: If I go with the cable provider, I will take my voice and broadband services from it…if I go with the ILEC, I’ll be looking to buy video and broadband services from it. The jury is still out on which sector will come out on top; it’s no doubt more likely that certain companies within both sectors will come out on top within their respective markets.

For the time being however, we continue to measure the cable industry’s relative progress in terms of penetration of both basic video subscribers as well as of homes passed. (In the long run we should likely begin to measure ILEC penetration levels based on homes passed as well, rather than on access lines.)

In the third quarter, the public cable companies were providing voice service to 44% of basic video subscribers, up from 39.5% at the end of last year. Impressively, 81.7% of basic cable connections were also taking broadband services from their cable provider, up 570 basis points this year-to-date.

Looking at penetration based on homes passed is more telling, however. Here, cable operators were providing broadband service to 35.5% of homes passed and voice penetration of homes passed was just more than 19%.

Cablevision reported the most impressive penetration stats for both voice and broadband (given that both GCI and Knology also have ILEC operations that skew their voice subscriber stats).  More than 90% of Cablevision’s basic subscribers were also taking voice and broadband services at the end of the third quarter—which translates to more than half of the homes passed.


1Q11 Connections: CATV Penetration of Basic Subs and Homes Passed

Cable Providers Deliver Voice and Broadband to More Customers

Voice and broadband penetration of basic subs and of homes passed continued to improve for the cable industry in 1Q11. Consistent with ILEC trends, CATV basic subscribers today are relying on carriers for two or three services more often than not. Despite losing video market share in 1Q11, cablecos continued to add voice and broadband subs, improving penetration levels in the process.

Penetration in the cable industry was more pronounced than for ILECs, with voice and broadband penetration levels at 41% and 78% of basic cable subs. By comparison, ILECs provided broadband and video services to about 42% and 29% of basic voice customers. Across the board, cable providers also improved penetration of homes passed for voice and broadband services. 

Knology (Nasdaq:KNOL) had the highest penetration of its basic cable subs in 1Q11 with voice and broadband penetration levels of 106% and 97%. Its business model is built on bundling, leading to a similar number of video, voice and broadband subs.  Knology’s business customers tend not to purchase video services however, resulting in a slightly higher number of voice subs.  

The second highest penetration levels belonged to GCI (Nasdaq:GNCMA) at 91% voice penetration of basic subs, and Cablevision (NYSE:CVC) at 88.5% broadband penetration of basic subs. GCI also provided voice services to 56% of homes passed, while Cablevision provided broadband to 53% of homes passed--both the highest penetration levels in the survey. 

At the low end, smaller competitors Washington Post (NYSE:WPO) and Suddenlink reported the lowest voice and broadband penetration of basic subs.  Washington Post also had lowest voice penetration of homes passed, along with Mediacom, at around 12%.


4Q10 CATV Penetration of Basic Subs

Cable Providers Deliver Broadband to 76% of Basic Video Subscribers

The cable industry may have been born for the purpose of providing video services, but increasingly, those “basic subs” are taking both broadband and voice services as well.  At the end of last year, the cablecos we track were providing broadband services to more than three-quarters of their basic subs, and nearly 40% were also voice subscribers.  Broadband penetration of basic subs increased by 670 basis points in 2010, while voice penetration rose 460 basis points. 

Knology’s (Nasdaq:KNOL) voice penetration exceeds 100%, although that figure fell in 4Q10 due to the acquisition of Sunflower Broadband. Knology’s voice penetration of basic video subs was more than 105% at the end of the year. GCI (Nasdaq:GNCMA) had the second highest voice penetration rate, at more than 90%, due to its CLEC activities.

Knology also had the highest broadband penetration in the sample,at nearly 95%, followed by Cablevision (NYSE:CVC), which delivered broadband service to 87% of its basic subs at the end of 2010.  


4Q10 CATV Penetration of Homes Passed

Cablecos Provide One-Third of Homes Passed with Broadband Connectivity

Collectively, the cable providers in our sample were delivering broadband service to 33.9% of homes passed at the end of 2010,  up from 32.1% a year earlier. The group was also providing voice service to 17.6% of homes passed, up from 16.2% at the end of 2009. The mean broadband penetration of homes passed was 35.2%, while the mean voice penetration at year end was 22.9%.

GCI (Nasdaq:GNCMA) topped the list in terms of voice penetration of homes passed, at nearly 56%; on the broadband side, Cablevision (NYSE:CVC) topped the list, serving 52.3% of homes passed, although that was down versus 54.4% at the end of 3Q10.