Telcos Gain High-Speed Steam

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Digital-subscriber-line service from phone companies is on track to gain a 52.8% share of new high-speed-data households in the fourth quarter of 2004 after losing the third-quarter share battle against cable modems, UBS Warburg LLC analyst Aryeh Bourkoff estimated.

DSL had gained 46.5% of new high-speed-data adds in the third quarter, the first such quarterly win for cable since the fourth quarter of 2003.

The cable-modem share of the high-speed-data residential business has dwindled to about 58.3% as of the end of 2004, down from 59.1% Sept. 30, the analyst calculated.

Bourkoff attributed DSL gains to price cuts at the telcos, particularly SBC Communications Inc. and BellSouth Corp.

“We believe the Bells will continue to gain flow share of net broadband additions as they continue to price their DSL product more aggressively,” he said.