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.