By: Jesse Cryderman
Battle Rages Between Cablecos, Telcos
A report from SNL Kagan last month revealed telcos are successfully siphoning off video
customers from the cablecos, and their multi-play bundles are driving the success. According to the
report, cablecos lost 3.8% of their multi-channel subscriber base across the top 15 markets in the US.
The data for Telco-enabled TV, however, was just the opposite. As a whole, telco video subs jumped by
24% across the top 15 markets in the US.
As data from the first quarter hit investor reports and news outlets, the battle between cablecos and telcos appears as fierce as ever.
A report from SNL Kagan last month revealed telcos are successfully siphoning off video customers from the cablecos, and their multi-play bundles are driving the success. According to the report, cablecos lost 3.8% of their multi-channel subscriber base across the top 15 markets in the US. The data for Telco-enabled TV, however, was just the opposite. As a whole, telco video subs jumped by 24% across the top 15 markets in the US.
On the other hand, MSOs are outstripping telcos in the race to add broadband customers. According to the daily publication at the Cable Show 2011, MSOs broadband subscriptions grew 2.08% in Q1 2011 over Q4 2011, versus 1.17% for telcos. The numbers looked even more disparate over the past year, with the cable companies reporting 8.79% growth in broadband subscriptions and telcos losing 7.03% of their broadband subscriber base.
Beyond the handoff in subscribers, customer service is emerging as a key driver in overall customer satisfaction, and cablecos are leading in the home office and SME categories. J.D. Powers' 2011 U.S. Major Provider Business Telecommunications Study indicated that Optimum Business (Cablevision) and Cox Communications are leading the pack.
“As annual improvements in network performance continue, empathy-related attributes, such as concern for customers’ needs, have materialized as elements that can make or break a service provider,” said Frank Perazzini, Director of Telecommunications at J.D. Power and Associates.
Net Neutrality
The Netherlands became the second country, following Chile, to enact formal net neutrality legislation last month, voting to treat all mobile data traffic equally. The ruling bars mobile carriers from blocking or taxing traffic that originates from OTT VOIP services such as Skype and free text applications. Carriers immediately responded, saying the legislation will "lead to a large increase in prices for mobile internet for a large group of consumers” (Vodaphone).
The news for consumers isn't quite so rosy in other parts of the world. In the UK, the government has no plans to enforce net neutrality at the moment, and in the US, the net neutrality debate has cooled down. While the FCC's net neutrality rules regarding transparency, blocking, and market discrimination quietly moved forward at the beginning of July, CSPs are actively fighting the rules, and many analysts feel the carriers will win. In the least, legal opposition to net neutrality will likely prevent widespread change in the US market for some time.
Virgin Media CEO Neil Berkett recently commented on net neutrality legislation, as well as the difference in the US and UK markets, at the Intellect Conference. "Because of [local unbundling] you have a dynamic marketplace and multiple levels of competition, whereas in the US there is rarely an overbuilt market. It's usually just AT&T and a cable operator and that's about it," Berkett said. "As such, the average return from a triple-play customer in the US is £70 to £80, but for us it's £44. Consumers benefit from this as the market is so competitive, but enforcing net neutrality would cut this off at the knees."
