Cable MSO Dynamics Tilt Toward Broadband Services - Analyst Blog

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Is it time to rechristen the U.S. cable TV industry as high-speed data industry? Cable MSOs (multi service operators), which offers triple-play video, data and voice services, have been so far relying on video/TV offerings for future growth. However, with the deployment of next-generation DOCSIS 3.0 technology, cable TV operators have extensively penetrated into the broadband (high-speed data) market.

According to a recent report by the Leichtman Research Group Inc. (LRG), the top nine cable TV operators accounted for a total of 49.915 million broadband subscribers as against 49.91 million video subscribers, at the end of second-quarter 2014. For the first-time in the 65-year long history of the cable TV Industry, broadband customer count surpassed the TV viewers count.

LRG further reported that there were approximately 85.9 million high-speed data subscribers at the end of the last quarter. Out of this, cable MSOs command around 50.7 million customers (59%) and the remaining 35.2 million (41%) customers belong to telecom operators.

Over the last six years, the internal dynamics of the U.S. pay-TV industry have been gradually shifting from cable TV offerings toward fiber-based video services of large telecom operators.

Moreover, the strong presence of online video streaming providers is posing significant threat to the existing pay-TV business model. Video offering, the core business area of the cable TV operators, seems to be slipping out of their hands.  

At this juncture, a strong growing momentum in the high-speed data market by the cable MSOs bodes well for the future. Leading cable TV operators including Comcast Corp. ( CMCSA ), Time Warner Cable Inc. ( TWC ), Charter Communications Inc. ( CHTR ) and Cablevision Systems Corp. ( CVC ) are increasingly emphasizing on the broadband market. On the other hand, telecom giants, such as Verizon Communications Inc. ( VZ ) and AT&T Inc. ( T ) continue to lose DSL subscribers.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: CVC , CMCSA , CHTR , TWC , T

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