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US Broadband Subscriber Addition Touches Multi-Year Low

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According to a recent research report by Leichtman Research, the top 14 pay-TV operators were able to add only 190,000 high speed internet customers in the second quarter of 2016. This data, per the research, marks the slowest pace of broadband subscriber addition in the last 15 years.

Cable Players Gain

Out of the aggregate subscribers added this quarter, leading cable multi service operators (MSO) like Comcast Corp. (CMCSA - Free Report) and Charter Communications Inc. (CHTR - Free Report) added 220,000 and 270,000 broadband users in the second quarter, respectively neutralized by the loss of 123,000 subscribers for AT&T Inc. (T - Free Report) and 83,000 customers for Verizon Communications Inc. (VZ - Free Report) . Another telecom player CenturyLink Inc. experienced loss of 66,000 subscribers.

Notably, of these 14 pay-TV players, cable MSO’s now account for about 62 percent of total broadband subscribers. Additionally, this quarter marked the largest second-quarter high speed digital (HSD) subscriber growth since 2008 for the cable companies. In comparison, its telecom counterparts lost a whopping 360,000 customers this quarter, compared to 150,000 from the year ago quarter.

The Bottom Line

It hasn’t been quarter worth remembering for the pay-TV operators. Earlier, per a report, pay TV operators lost around 663,000 video subscribers this year. Pressure from online video streaming service providers like Netflix Inc. (NFLX - Free Report) and Hulu.com has led to high churn rates of video subscribers in the industry.

Thus, a low broadband subscriber growth will be a source of additional concern for the pay-TV operators, particularly for the telecom players running video services. However, as alternative services emerge, the industry players look forward to counter favorable customer churn rates going ahead.

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