Demand for North America Broadband Flat in 3Q11

It’s both good news and bad news:  demand for broadband in North America was flat during 3Q11, growing 1% to reach 98.5M, with net additions nearing 1 million.  However, net additions are down almost 25% from the same period last year.  Historically, 3Q is always a banner quarter where demand for services rebound from the lulls of 2Q, when college students suspend or cancel subscriptions and people tend to move. 

But this year it is different.  Broadband penetration has reached 73% of households in the U.S. and nearly 80% of households in Canada.  The dismal housing climate has certainly had an impact on demand, as new housing starts remain at historic lows and home sales remain muted as people stay put.  In addition, faster mobile broadband speeds combined with smart phones, have probably siphoned off a small percentage of fixed subscribers, but this is unlikely to have significant impact – due to bandwidth consumption caps that can be prohibitively expensive.

So how did 3Q11 shape up?  There remain a handful of operators that have not reported, but the majority of results are in and here are the highlights:

  • Cable operators accounted for 85% of total net additions, compared to 15% for Telcos (both DSL and FTTH)
  • FTTH represented 85% of total Telco net additions
  • FTTH represented 5.6 million fixed broadband subscriptions, with Verizon representing 82% of total
  • Telco net additions (both DSL & FTTH)  declined 55% from 2Q11, while Cable additions increased by 53%
  • DSL net additions declined by 87% quarter-over-quarter

Market Share for 3Q11 is shown below:

As shown, Comcast remains the market leader with 18% share, followed by AT&T.  For 3Q11, Comcast added 27% (261k) of all broadband net additions.  The second largest contributor was Time Warner Cable (105k).  On the Telco side, CenturyLink added the most at 57K. AT&T had only 3K net additions to its broadband service – as most U-verse high speed additions where simply substitution of lower-speed DSL, rather than new subscribers.

There are just over 88M fixed broadband subscribers in the U.S. and 10.5M in Canada at the end of 3Q11.

We will take a look at how video operators fared next week.

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