Telecoms Selling TV Have Bigger Impact on Cable Firms

Coverage Type: reporting
USA, United States

Nearly a decade after Verizon Communications and AT&T began building pipelines to carry TV service to US homes, they are nearing the market share of cable operators in areas where they operate, according to third-quarter results released by cable and phone companies in recent days.

The top two cable providers, Comcast and Time Warner Cable, shed 435,000 video customers in the quarter, while AT&T and Verizon added 400,000. The growth of telecom's share of the TV business could have a significant impact on the television industry. Both phone companies have shown a greater willingness than their cable rivals to experiment with delivering movies and TV programming over the Internet outside the traditional pay-TV bundle. AT&T and Verizon are now the fifth and sixth biggest pay-TV providers in the U.S. after Comcast and Time Warner Cable and the two satellite-TV companies, DirecTV and Dish Network Corp. The phone companies account for only about 10% of the pay-TV market, compared with 55% for cable, according to MoffettNathanson LLC, but that is largely because phone companies don't offer service everywhere cable does. In the markets where they do operate, Verizon isn't far behind cable: FiOS has signed up 35% of the households where it offers its service, compared with 40.3% for Comcast and 38.9% for Time Warner Cable. AT&T's average is much lower, but it has become much more aggressive lately, launching a $6 billion investment in its wireline operations last year that includes extending the reach of its TV service.


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