Analyst Sounds Warning Bells for Cable Broadband

US cable has been routing the telecommunication competition on the broadband front, but a top industry analyst says he’s concerned about whether cable companies can sustain its rate of growth as the DSL opportunity dissipates and operators face more competition from fiber-fed Internet service providers.

“Cable’s victory in broadband is turning into a rout,” Craig Moffett of MoffettNathanson explained in a research note. “But beneath the surface there are reasons for watchfulness, if not for outfight concern, for cable.” He said US broadband is “rapidly approaching saturation” while the pool of DSL subscribers from which cable has drawn from is likewise “rapidly dwindling.” In Q3, cable captures 118 percent of market growth in broadband, as the rate of growth accelerated to 6.4 percent -- “the fastest pace in years.” The telecommunication companies, meanwhile, lost ground.