Tough Days For Verizon And Comcast: Broadband Growth Slows
August 21, 2007 by Douglas A. McIntyreVerizon (VZ) and Comcast (CMCSA) along with all of their other telecom and cable friends have been hoping that the broadband growth party would never end. VZ has put $23 billion into its FiOS fiber-to-the-home project, and CMCSA is counting on rising digital cable and VoIP demand to keeps its revenue moving up.
CIBC says that sharp increase in broadband households that has shown up in quarterly earnings for the past several years is about to end. According to Briefing.com, US broadband growth will slow in 2008 and get worse in the years after that. The reasons the firm gives are that about 30% of households do not use the Internet, migration of value oriented dial-up subscribers is set to get more difficult, and incremental infrastructure upgrades have stalled around 85% coverage.
This means that VZ, CMCSA, AT&T (T), Time Warner Cable (TWC) and their smaller rivals will be faced with taking business from one another instead of from a growing base. If the broadband market is like all others, slowing growth means more price competition and lower margins.
The broadband business may be about to get worse.
Douglas A. McIntyre
Take This Retirement Quiz To Get Matched With A Financial Advisor (Sponsored)
Take the quiz below to get matched with a financial advisor today.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the
advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Take the retirement quiz right here.