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Cable Companies Expand Broadband Lead in U.S.; Subscriber Adds Up 35%

Phillip Dampier November 15, 2018 Broadband Speed, Competition, Consumer News 3 Comments

Cable companies continue to dominate the U.S. broadband marketplace, and the gap between cable broadband and telephone company DSL continues to widen.

Leichtman Research Group reports the top seven cable companies together added 728,423 internet customers in the last three months, an increase of 35% over 2017. One of the biggest gainers was Comcast, which grew 363,000 subscribers during the third quarter. At the same time last year Comcast added 213,000 customers. Charter Spectrum grew by 308,000 customers in the third quarter, bolstered by speed upgrades in select areas and more aggressive promotions. At the same time in 2017, Spectrum added 285,000 customers.

Cable’s gains are phone company losses. AT&T, Frontier, CenturyLink, and Consolidated (formerly FairPoint) saw 159,974 customers disconnect service in the last three months. Phone company losses were buffered in part by government-funded rural broadband expansion campaigns, which typically introduce broadband service in rural areas for the first time. Where customers have a choice, they are increasingly choosing cable companies to supply internet service because speed and reliability are often better, especially compared to DSL service still prevalent in a lot of areas.

Broadband Providers Subscribers at end of 3Q 2018 Net Adds in 3Q 2018
Cable Companies
Comcast 26,872,000 363,000
Charter 24,930,000 308,000
Cox* 5,040,000 20,000
Altice 4,096,300 14,200
Mediacom 1,260,000 9,000
WOW (WideOpenWest) 755,100 7,300
Cable ONE 660,799 6,923
Total Top Cable 63,614,199 728,423
Phone Companies
AT&T 15,746,000 (26,000)
Verizon 6,958,000 2,000
CenturyLink^ 5,435,000 (71,000)
Frontier 3,802,000 (61,000)
Windstream 1,015,000 8,300
Consolidated^^ 781,912 (1,974)
Cincinnati Bell^^^ 310,700 200
Total Top Telco 34,048,612 (149,474)
Total Top Broadband 97,662,811 578,949

Sources: The Companies and Leichtman Research Group, Inc.

*LRG estimate
^CenturyLink only reported residential subscribers in 3Q 2018.  LRG estimate including non-residential subscribers
^^Consolidated includes a minor sale of a local exchange carrier
^^^Cincinnati Bell does not include the acquisition of Hawaiian Telecom
Company subscriber counts may not solely represent residential households. Top cable and telephone companies represent approximately 95% of all subscribers.

U.S. Broadband Growth Slowing – 2.1 Million New Connections in 2017 (2.7 Million in 2016)

Phillip Dampier March 13, 2018 Consumer News Comments Off on U.S. Broadband Growth Slowing – 2.1 Million New Connections in 2017 (2.7 Million in 2016)

Broadband growth is slowing in the United States as internet service providers have an increasingly hard time finding new subscribers who do not already have internet service in their homes and businesses.

In 2017, telecom companies attracted 2.1 million new customers, in contrast to 2.7 million in 2016.

Leichtman Research Group reports that among 14 ISPs which control 95% of the U.S. market, cable companies are about the only ones still growing, mostly at the expense of their phone company competitors. Cable companies now provide access for 61.2 million customers, representing almost two-thirds of the market. Phone companies continue to lose market share but still have 33.9 million internet customers.

Some statistics:

Cable Companies

  • Charter Communications was the marketplace leader in broadband net additions, picking up 1.3 million new internet access customers in 2017. Spectrum is the second largest broadband provider in the country, with 23.9 million customers.
  • Comcast retained its position as the country’s largest provider, picking up an additional 1.2 million internet access customers in 2017. It now serves 25.9 million broadband customers.
  • Altice, which operates as Cablevision/Optimum and Suddenlink, saw particularly weak growth in 2017, adding only 83,700 customers.
  • Mediacom added 47,000 new internet customers to its roster of 1.2 million current customers and WOW picked up 11,100 new broadband subscribers last year.

Phone Companies

  • Only AT&T added net new customers in 2017, picking up 114,000 new subscribers to add to its 15,719,000 current internet customers.
  • Verizon lost 79,000 customers and is down to just short of seven million subscribers.
  • CenturyLink lost 283,000 customers and is now down to 5,662,000 customers.
  • Frontier dropped 333,000 customers from its roster of 3.9 million current internet customers.
  • Windstream ended 2017 with 44,500 fewer internet customers, retaining just over one million subscribers.

Average Cable TV Bill Now Over $100/Month; “Every Year is a New Record High”

Phillip Dampier September 28, 2016 Competition, Consumer News Comments Off on Average Cable TV Bill Now Over $100/Month; “Every Year is a New Record High”

640px-obverse_of_the_series_2009_100_federal_reserve_noteFor the first time, the average American now pays over $100 a month just to watch television.

Leichtman Research Group, which has measured cable television rates annually for years, just released a report finding the average amount paid for cable television is now $103.10 a month. That’s an increase of about 4% over last year, the lowest annual increase in five years. But it’s still a 39% increase from 2011-2015, which is nearly eight times the rate of inflation.

As rates rise, customers are increasingly cutting cable’s cord for good. More than 800,000 Americans said goodbye to cable TV in the second quarter of this year alone, according to cable industry researcher SNL Kagan. eMarketer says the biggest reason customers are leaving is obvious: higher bills.

“About 82% of households that use a TV currently subscribe to a pay-TV service. This is down from where it was five years ago, and similar to the penetration level eleven years ago,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc. “The rates of those exiting the category, or intending to leave, are actually similar to recent years. The decline in penetration is also due to a lack of those who are coming into the category, and the industry not keeping pace with movers and related rental housing growth.”

Customers are no longer fooled by promotional rates that offer cable TV for $30-50 a month, usually expiring after one year. Once their first bill arrives, they are unhappy to discover growing mandatory equipment fees and bill padding charges for sports programming, local stations, fake official-sounding surcharges like “regulatory recovery fees,” and more.

“Once the XFINITY bill arrives, my $60 television promotion is $104 after the $5 fee for local stations, $3 for sports, additional outlet charges, equipment rental fees, and taxes/surcharges,” said Comcast customer Dan Ho from central California. “You almost have to take the internet and phone service just to feel like you are getting anything of value for your money, because the bundle price seems like a better deal.”

cable-bill

The cable industry argues cord-cutting won’t save consumers much money, but as Fortune magazine reports, those arguments are traditionally based on temporary rates that never tell the whole story,

“Too often, the comparisons quote a low, promotional, or entry-level price for the cost of a cable TV package instead of looking at the real prices people actually pay,” wrote Fortune author Aaron Pressman. “Left out of the superficial analysis all too often are set-top box fees, regional sports network fees, fees dressed up as faux taxes, and actual taxes.”

Fortune adds every year is a new record high for cable television bills.

Leichtman Research reports that once consumers cut the cord, an increasing number never look back, while those still subscribed to cable are often earching for a better deal:

  • Overall, about 3% of TV households last subscribed to a cable/pay-TV service 1-3 years ago, about 6% subscribed over 3 years ago, and about 6% never subscribed to a pay-TV service;
  • 7% of current cable subscribers did not subscribe to a TV service for more than a month at some time over the past two years;
  • 25% of those who moved in the past year do not currently subscribe to a cable TV service — a higher level than in previous years;
  • 12% of cable subscribers are likely to switch from their provider in the next six months — similar to 11% in 2015, and 12% in 2014;
  • 6% of pay-TV subscribers are likely to disconnect from their provider and not subscribe to any TV service in the next six months — similar to 7% in 2015, and 7% in 2014.

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