Cable companies battle for subscribers with fiber-to-the-home providers
Cable companies could soon find themselves stuck between a rock and a hard place as battles with fiber-to-the-home providers for subscribers intensify. Analysts at Cowen Equity Research noted cable’s standard response to competition from these players has been to lock in subscribers with promotional rates. But these rates are only available for new customers and “existing cable subscribers face substantially higher rates for broadband.” Cowen’s analysts asserted that “given the national customer bases that large Cable companies have, broad price cuts are highly unlikely, thus leaving Cable in a bind, having to decide whether to cede share or cut [average revenues per user].” While cable operators have repeatedly downplayed the threat from fiber competitors, the broadband landscape is set to change substantially over the coming years. New Street Research recently predicted that with help from government subsidies, fiber will pass around 80 percent of cable homes by 2030. Cable also faces pressure from fixed wireless broadband, which New Street Research forecasts would rake in 2.4 million net additions in 2022 compared to cable’s 1.5 million and fiber’s 1.9 million.
Fiber could force cable to choose between APRU and market share