As DSL withers away over the next decade and the need for speed increases, cable will pick up considerable share of the U.S. broadband market — rising from 60% today to nearly 70% by 2020, according to Sanford Bernstein senior analyst Craig Moffett’s projections.
“Cable is indeed winning the broadband wars,” he wrote in a research note Wednesday. “Cable’s physical infrastructure is a better mousetrap for broadband.”
Yes, the telcos’ fiber-based Internet services (FiOS and U-verse) will keep racking up subs. But their fiber builds are nearing the end — and by 2020, just 48% of U.S. households will have a telco fiber-delivered broadband option versus 46% today, according to Moffett’s forecast.
DOCSIS will carry the day: Cable’s share of broadband connections will rise to 67.7% by 2015, and to 69.6% by 2020. DSL, which has 28.2% share today, will shrink to 8.8% by 2020, per Moffett’s analysis. From 2011 to 2020, Verizon’s FiOS share will grow from 6.0% to 7.9%, while U-verse will rise from 4.7% to 10.1%.
To Moffett, the Verizon Wireless decision to market the services of Comcast, Time Warner Cable and Bright House Networks is an admission that the telco doesn’t have a competitive wireline offering outside the 14% of the U.S. covered by FiOS: “For the ‘other 86%,’ Verizon apparently recognized that cable is the best available answer.”
Meanwhile, Moffett notes, the satellite guys are nowhere in the broadband mix right now. And Verizon signaled that it doesn’t intend to move forward with a combo LTE/satellite TV project with DirecTV.
“The lack of a broadband pipe is a clear strategic vulnerability for DirecTV and Dish Network (and Dish Network’s potential construction of a wireless one is a potentially large negative for the stock),” he said.
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