Its been a while since I've written a blog post - so forgive me if I am a bit rusty. :)
I’ve been tracking the broadband market for longer than I am willing to disclose – let’s just say since before the turn of this century. This provides a long-term view on broadband adoption rates of not only speed but technology transitions, as well as providing a great perspective on the changes over time in not only the vendor space, but the service provider space as well.
But instead of a history lesson, let’s just focus on 2024. And we will narrow it down a bit more to just the U.S. market.
The Data
The U.S will likely end the year with approximately 134.6 million broadband subscribers distributed as follows:
Cable broadband continues to dominate the market with Comcast and Charter making up nearly 80% of the total cable broadband market, while AT&T and Verizon represent about 50% of the FTTH market. T-Mobile has rapidly taken the lead on the Fixed Wireless Access segment.
Over the past 5 years – FTTH subscribers have essentially doubled from 17.4 million to 34 million, while DSL subscribers have dropped by 50 percent (from 20.8 million to 9.4 million) during this same period.
During 2024, broadband subscriber losses at cable operators accelerated - losing approximately 1.4 million, following a loss of 1 million in 2023 - despite aggressive packaging with mobile phone offerings.
During this same period, we have also seen a significant shift in the adoption of faster speeds. In 2019, only 5.3% of subscribers were greater than 1Gbps, while at the end of 2023 this had grown to 24.2%. Based on current growth rates, I expect nearly 30% of subscribers will have speeds of 1Gbps or greater at the end of this year.
During 2024, multi-gigabit broadband services became commonplace with operators offering 2Gb, 5Gb, 8Gb, 10Gb and in the case of GFiber - 20Gb - although adoption of speeds greater than 2Gb remains nascent.
Changes in Service Provider Landscape
There were some notable mergers and acquisitions in the service provider space during 2024.
Some highlights include:
Verizon Acquires Frontier
Bell Canada Acquires Ziply
T-Mobile forms joint ventures to acquire Lumos and Metronet
Of all of these, T-Mobile's entry into the fixed broadband space is most notable. In both cases, the acquired company will act as a wholesale provider, while T-Mobile takes over the retail business of providing broadband. T-Mobile is already partnered with a number of Open Access Wholesale providers (including Tillman FiberCo, SiFi Networks, Intrepid Networks and Pilot Network) to offer fiber-based fixed broadband across 7 states. Its acquisitions/JVs with both Lumos and Metronet offer T Mobile the ability to rapidly expand its addressable market.
The big question will be who will seek the mass market assets of Lumen? With 4.1 million fiber enabled units and another 17.9 million other broadband enabled units up for grabs - this provides a huge opportunity for the lucky (or perhaps unlucky) winner. Given TMobile's current acquisition strategy - I would put them in the top spot partnering again with private equity to form a JV. Although this could make sense for Verizon - they will have their hands full with Frontier. AT&T is also a possibility, but with such a large portion of the network still on copper - this would go against their current strategy to retire their copper plant by 2030.
What's in store for 2025?
2025 starts with uncertainty. Uncertainty with the change in the administration and how this impact the broadband industry. Although the BEAD process is pretty far down the path - a significant number of states remain in the prequalification and application phase. Will they be encouraged to shift their focus from a fiber future towards whatever technology gets the unconnected connected?
What about open access? 3+ years into the process for some of these firms - will their investors continue to invest or will they suffer the same fate as Tucows (Ting Internet) as they were unable to raise additional capital for continued market expansion?
M&A activity will continue and perhaps accelerate as smaller providers continue to merge in order to create the scale necessary to compete for mindshare and dollars.
Subscriber growth will begin to slow - we are reaching the peak of adoption (96% of addressable dwellings and establishments) and now its a shell game as subscribers switch from one type of broadband to another.
So many moving pieces in the broadband space these days - so we will stick to the facts: Fiber is most definitely growing - but during 2024 - FWA adding nearly the same number of subscribers as FTTH. There are still nearly 10 million subscribers on DSL. For those BSPs that have not yet started to roll out fiber in these markets - watch out - your footprint is ripe for the picking by wholesale providers such as Gigapower and others.
While there is so much more I could write about - I will stop here. Wish you a very happy 2025 and thank you for reading to the end.
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