by Daniel Frankel
April 17, 2017
Prices charged by cable operators for broadband services will double over the next several years, offsetting declines from broadband saturation and erosion of linear pay-TV services, says New Street Research analyst Jonathan Chaplin.
In a note sent out to investors over the weekend, Chaplin noted that while cable operators continue to steal high-speed internet marketshare from telephone companies, MSO’s rate of ISP customer growth is actually slowing.
Chaplin said customer growth came in at 6.4% in the fourth quarter of 2016, down both year-over-year (from 6.9% in Q4 of 2015) and sequentially (down from 6.9% in Q3 of 2016).
Net additions of HSI customers for cable companies, meanwhile, were down in Q4 to 3.783 million from 3.840 million in the fourth quarter of 2015
Chaplin believes cable operators are poised to capture the bulk of the remaining adds.
“Our long-term penetration forecast is predicated on cable increasing its market share, given a strong network advantage in 70% of the country (this assumes that telco fiber deployment increases from 16% of the country today to close to 30% five years from now).”
Cable operators controlled 65% of the U.S. broadband market at the end of 2016, Chaplin added. By 2020, he estimates their market share will grow to around 72.2%.