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AT&T, Verizon Stage a Q4 Comeback
Rollout of Fiber Fuels Broadband Subscriber Growth
Boston, MA - 19 February 2009 -- Despite a stubbornly sour economy and contracting consumer spending, Broadband Service Providers AT&T (ATT) and Verizon (VZ) each posted their third consecutive quarter of positive net additional subscriber growth in the fourth quarter of 2008. Cable giants Comcast (CMCSA) and Time Warner Cable (TWC) on the other hand, experienced dramatic declines in net additional subs.
Verizon added a net 214,000 subscribers in the quarter; its fiber product FiOS achieved an Internet penetration rate (sales as a percentage of potential customers) of nearly 25%, with an estimated 10 million FiOS homes passed at year-end. AT&T netted 242,000 additional subscribers in Q4, compared to 149,000 in the third quarter. Much of this growth was fueled by the companies' respective fiber offerings.
"Fiber net adds more than compensated for the Telcos' loss in traditional ADSL services," pointed out John Lee, analyst, in the Strategy Analytics Digital Consumer Practice. "Fiber's performance this quarter highlights the broadband consumer's insatiable appetite for speed."
Fiber (FTTx) services advertise data rates of between 20 Mbps and 50 Mbps, while typical cable broadband speeds are on the order of 10 Mbps to 15 Mbps.
Cable companies witnessed declines in net additional subscriptions, with Philadelphia-based Comcast seeing its fewest quarterly net additions in over two years. Likewise, Time Warner Cable experienced its lowest rate of net adds in the year, netting only 105,000 subscribers in Q4, compared to 214,000 in the previous quarter.
"Cable is facing a new competitive reality," noted Ben Piper, Analyst and Director of the Strategy Analytics Multiplay Market Dynamics Service. "The Telco fiber offering, up until recently viewed as a niche service, is evolving into a product with high mass market appeal."
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