Cable continues to absolutely dominate phone companies when it comes to quarterly broadband user additions. According to the latest data from Leichtman Research, broadband additions last quarter were the lowest the firm has seen since it began tracking the industry fifteen years ago. That said, while cable managed to add a net 553,293 broadband subscribers on the quarter, the nation's phone companies saw a net loss of 360,783 broadband users during the same period.
According to Leichtman, phone companies have now seen net broadband losses in four of the past five quarters.
"While Telcos lost more broadband subscribers in 2Q 2016 than in any previous quarter, cable companies added over 550,000 subscribers in the traditionally weak second quarter," said Bruce Leichtman. "Over the past year, cable companies have added about 3.5 million broadband subscribers, while Telcos have had net losses of about 500,000 broadband subscribers."
Curiously, Leichtman doesn't explain why this is happening.
Most of these customers are fleeing to cable because they're tired of last-generation DSL speeds. AT&T and Verizon are giving up on huge swaths of unwanted DSL territories, either selling them to smaller phone companies, or actively trying to drive them away via DSL price hikes. Their focus is now almost exclusively wireless service, which despite hype still isn't an adequate replacement for fixed-line service (especially on price).
Meanwhile, many of the companies acquiring these unwanted users (CenturyLink, Frontier) are only doing so to present the illusion of healthy growth to Wall Street. In reality, these acquisitions are saddling these companies with so much debt, they're left unable to afford meaningful copper to fiber upgrades in any scale. Others (Windstream) see so little competition in mostly rural markets they have no incentive to try very hard, something that users notice fairly consistently.
In addition to frustrating DSL customers, this is giving cable a greater monopoly than ever before across huge swaths of America. With less real competition than ever, there's less incentive in many market than ever before for cable providers to lower prices or improve historically abysmal customer service. This lack of competition and overall cable consolidation is also opening the door to a spike in usage caps.
So while this dominance is good news if you're named Charter or Comcast (who collectively added about 500,000 of cable's total all by themselves), this increasingly asymmetrical competition is not going to be great news if you're looking for lower prices and better customer service.