As telcos and cable companies report Q3 results, don’t expect much to change from last quarter: The cable industry, which offers faster Internet service in most markets, should continue to dominate new subscriber sign-ups.
AT&T, which posted Q3 earnings this morning, signed up 148,000 net new broadband subs last quarter — in line with expectations, and an improvement from its 46,000 net sub adds in Q2. But that’s still down significantly from a year ago, when the telco signed up 499,000 net broadband subs in Q3.
AT&T (T) probably got a lift from its fibre-based “U-Verse” broadband service, which it offers in 69 markets. Likewise, Verizon’s (VZ) broadband results, due next Monday, will get a lift from its fibre-optic FiOS broadband service. But Goldman analyst Jason Armstrong notes today that fibre-based telco service is only available in about 10% of the cable industry’s footprint.
So what does that mean for the Q3 broadband market? Armstrong expects cable to represent 68% of overall net subscriber additions — down from last quarter’s 78% share, as telcos increased promotional activity, but still strong.
We’ll follow this battle closely and once a few more companies report, publish a chart like we did last quarter.