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Cable MSOs Maintain Lead in High-Speed Broadband Market
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Per a recent report by Leichtman Research Group Inc. (LRG), the cable multi service operators (MSOs) in the U.S. have successfully maintained their lead over telecom operators in the high-speed broadband (Internet) market. This comes as a respite, especially at a time when the cable TV operators have been losing their foothold in the core video market to fiber-based telecom operators and online video streaming service providers.
The second quarter of 2014 marked the first in the 66-year long history of the cable TV Industry, where cable MSOs outpaced telecom operators in the high-speed broadband market. Since then, cable MSOs have been rapidly gaining a foothold in the space.
According to data compiled by LRG, 14 prime cable TV and telecom operators jointly had approximately 93.9 million high-speed Internet subscribers at the end of the first quarter of 2017, representing more than 95% of the nation’s total broadband market. Of the count cited, cable MSOs commanded nearly 59.35 million subscribers (63.2%) while the remaining 34.55 million customers (36.8%) were serviced by telecom operators.
In the first quarter of 2017, the top two cable MSOs, namely, Charter Communications Inc. (CHTR - Free Report) and Comcast Corp. (CMCSA - Free Report) added 458,000 and 430,000 high-speed broadband subscribers, respectively. Contrarily, telecom behemoth Verizon Communications Inc. (VZ - Free Report) lost 27,000 subscribers. Frontier Communications Corp. lost a massive 107,000 high-speed Internet subscribers. However, AT&T Inc. (T - Free Report) added a net 90,000 high-speed broadband customers. Comcast currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Notably, in 2016, seven major cable TV operators added a net of 3.3 million high-speed Internet subscribers. This figure was almost similar to that of the previous year’s net subscriber addition. On the other hand, seven major telecom operators lost 599,000 net subscribers compared with a loss of just 185,000 customers in the previous year. As a result, total net high-speed broadband subscriber addition in 2016 was 2.701 million.
In the last ten years, the internal dynamics of the pay-TV market have been gradually shifting from cable TV offerings to fiber-based video services of large telecom operators. Moreover, the strong presence of online video streaming providers is posing a significant threat to the existing pay-TV business model. Video offering, which represented the core business function of cable TV operators, seems to be slipping out of their hands fast.
Nevertheless, of late, with the deployment of the next-generation DOCSIS 3.0 and DOCSIS 3.1 technologies, cable TV operators have extensively penetrated into the high-speed Internet market. In an attempt to capitalize on this technology, leading cable TV operators are increasingly emphasizing on the broadband market. At this juncture, a strong momentum in the high-speed data (Internet) market bodes well for cable MSOs.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
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Cable MSOs Maintain Lead in High-Speed Broadband Market
Per a recent report by Leichtman Research Group Inc. (LRG), the cable multi service operators (MSOs) in the U.S. have successfully maintained their lead over telecom operators in the high-speed broadband (Internet) market. This comes as a respite, especially at a time when the cable TV operators have been losing their foothold in the core video market to fiber-based telecom operators and online video streaming service providers.
The second quarter of 2014 marked the first in the 66-year long history of the cable TV Industry, where cable MSOs outpaced telecom operators in the high-speed broadband market. Since then, cable MSOs have been rapidly gaining a foothold in the space.
According to data compiled by LRG, 14 prime cable TV and telecom operators jointly had approximately 93.9 million high-speed Internet subscribers at the end of the first quarter of 2017, representing more than 95% of the nation’s total broadband market. Of the count cited, cable MSOs commanded nearly 59.35 million subscribers (63.2%) while the remaining 34.55 million customers (36.8%) were serviced by telecom operators.
In the first quarter of 2017, the top two cable MSOs, namely, Charter Communications Inc. (CHTR - Free Report) and Comcast Corp. (CMCSA - Free Report) added 458,000 and 430,000 high-speed broadband subscribers, respectively. Contrarily, telecom behemoth Verizon Communications Inc. (VZ - Free Report) lost 27,000 subscribers. Frontier Communications Corp. lost a massive 107,000 high-speed Internet subscribers. However, AT&T Inc. (T - Free Report) added a net 90,000 high-speed broadband customers. Comcast currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Notably, in 2016, seven major cable TV operators added a net of 3.3 million high-speed Internet subscribers. This figure was almost similar to that of the previous year’s net subscriber addition. On the other hand, seven major telecom operators lost 599,000 net subscribers compared with a loss of just 185,000 customers in the previous year. As a result, total net high-speed broadband subscriber addition in 2016 was 2.701 million.
In the last ten years, the internal dynamics of the pay-TV market have been gradually shifting from cable TV offerings to fiber-based video services of large telecom operators. Moreover, the strong presence of online video streaming providers is posing a significant threat to the existing pay-TV business model. Video offering, which represented the core business function of cable TV operators, seems to be slipping out of their hands fast.
Nevertheless, of late, with the deployment of the next-generation DOCSIS 3.0 and DOCSIS 3.1 technologies, cable TV operators have extensively penetrated into the high-speed Internet market. In an attempt to capitalize on this technology, leading cable TV operators are increasingly emphasizing on the broadband market. At this juncture, a strong momentum in the high-speed data (Internet) market bodes well for cable MSOs.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>