What a whopper of a year for cable telephony!
Cablevision, the last MSO to report its fourth quarter earnings added 130,000 new VoIP customers, up just 7,000 from the previous quarter. The company also added, 94,000 new broadband customers, up from 81,000 adds in the previous quarter. For 2005, Cablevision added 341,793 broadband subscribers and 458,653 VoIP subscribers. Time Warner had also experienced similar growth for its broadband and VoIP services. Some of the smaller players are experiencing triple digit growth in their voice subscribers. According to UBS research estimates, there were 5.1 million cable voice users at year end, up 63% annually and 14% sequentially.
Telegeography estimates that nearly 900,000 new subscribers were added in the final three months of 2005, and cable providers now account for nearly 52% of the total market. Their total differs from UBS by about 700,000 subscribers. Telegeography says that there are 4.5 million VoIP subscribers in the US. Phone companies come in with 11% share of the market, and independents like Vonage have 37% of the market. They are forecasting that there will be 7.9 million VoIP subscribers by end of 2006, and revenues will hit $2.1 billion. That is up from about a billion dollars in sales for 2005.
Cable telephony subscribers currently represent roughly 9% of telephony-ready homes, 10% of basic cable subscribers, 24% of cable-modem subscribers or roughly 7% of Bell households, UBS says, which means that things are going to get a tad difficult for independents like Vonage and Sun Rocket, and also for Bells which are scrambling to roll out their triple play offerings.
The cable VoIP growth is going to be good news for folks like Motorola (GI group) which has been doing a lot of work on VoIP quietly. Motorola has shipped over 2 million voice-enabled cable modems to date, according to company sources. I think it is time to focus away from RAZR and instead zero in on the broadband division.