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Summary:

For a very long time, Comcast has been the #1 broadband service provider in the US. But it might be getting ready to lose its top spot to none other than AT&T, which reported a blockbuster quarter adding 691,000 new DSL subscribers (of which 681,000 are […]

For a very long time, Comcast has been the #1 broadband service provider in the US. But it might be getting ready to lose its top spot to none other than AT&T, which reported a blockbuster quarter adding 691,000 new DSL subscribers (of which 681,000 are consumer DSL adds, Cynthia Brumfield, tells me) and taking its total subscriber base to 12.9 million.

In comparison, Comcast had 11.5 million subscribers at the end of 2006. So in order to stay dead even with AT&T, Comcast would need to add 1.4 million new subscribers for its broadband service in the first quarter of 2007, much higher than its quarterly average of 450,000+.

If you add 300,000-odd high speed customers it picks up as part of its deal with Insight, even then it would be difficult for Comcast to beat the AT&T total. For now, a DSL-based service provider is #1 in US.

By Om Malik

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  1. I agree with your math. But, AT&T and Verizon are facing a more difficult calculus. The drop in landline business as customers move to cable-based VoIP is continuing to accelerate. And, the growth of wireless sales is starting to slow as saturation levels get high in the US.

    If fiber-based TV offerings don’t do well, the future for the phone companies is going to be rough.

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  2. Douglas,

    You should read the previous post, and my previous coverage on att and bells losing their voice – aka their core business value proposition to the cable. anyway i think it is an ongoing problem, and they are all in a race against time.

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  3. Simple pricing advantage. DSL is so much cheaper than Cable and in most cases, the quality improvement is negligible since it’s not about the pipe in those cases. Given the premium bundling, and margin my guess is with Comcast, less is probably more though.

    I agree with the other posts, but the bells have an advantage in that mobile / IP convergence will be the advantage of single point for settlement and access to personalized information. The emotional link to the mobile handset and services is pretty tight.

    It’s not always about bandwidth.

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  4. For me it was all about bandwidth. AT&T couldn’t deliver. I switched to voip and that offset the cost of switching to cable.

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  5. Having used both DSL and Broadband, You can’t compare the speeds Broadband achieves, from my experience is much faster. I have also noticed the reliability with comcast to be far superior to any version of DSL I have ever used. We can’t compare Apples and Oranges.

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  6. Personally I don’t think most DSL offerings should be considered broadband, but that’s a different story.

    Keep in mind that its one thing for AT&T or Verizon to lose a voice customer, its another for a cable company to lose a voice/video/data customer to a telco.

    The multiplier there is at least 3 and probably higher than that. Not all customers are created equal, especially with voice trending to zero.

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  7. Telcos have figured out the end game and are racing to get there first.

    Eventually, virtually all homes will have a broadband connection (albeit, much faster than most current broadband) and all services will be delivered over that broadband connection. Access line count becomes a meaningless metric; the number of broadband subs is the way service providers will measure themselves. The result will be a rough duopoly between “telcos” and “cable guys” (even though, someday, we’ll forget why we call them telcos and cable guys).

    Duopoly calculus states that you need to move real fast in order to secure a bigger piece of the pie. If you’re fast, you might get 55% or 60%, leaving the other guy with 45% or 40% (disregarding the small sliver of the market that will go to alternative providers). If you’re slow, you lose. To further complicate the issue, churn on broadband connections that are carrying a multiplicity of data, voice, and video services is extremely low. So whatever market share you end up with is likely to be what you live with for a very long time.

    This is why telco net broadband adds have exceed those of cable for the past eight or nine consecutive quarters.

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  8. Good points Kevin, though I think low price is the driver of growth for AT&T in this most recent quarter. I think cable companies need to respond with a budget offering: like 3 megs down for $15 a month if you buy voice.

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  9. It ATT added 691K to bring it to 12.9 million, then it had 12.2 before the quarter. Is that not more than 11.5 million that Comcast had prior to this quarter? There seems to be something screwy with the math here, or did I miss something?

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  10. Alex,

    in the last quarter, AT&T and bellsouth reported separate results and were not counted as one company. Now they are together, that puts them ahead.

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