Slowing Economy Slowing Broadband Growth

The demand for broadband skidded sharply during the fourth quarter of 2008. We went through the latest quarterly financials of all the major broadband service providers and collated the net new subscriber additions –- and so far, things aren’t looking good. Of the 12 majors, five companies, including Cablevision, aren’t due to report their quarterly results until later this month or early March.

Nevertheless, the sharp decline in net new additions is pretty clear (see the chart below). The downturn has been particularly hard on cable companies, especially Time Warner Cable, which saw a 44 percent decline in new additions.

Verizon has posted the best performance so far, while AT&T is seeing some benefit from the rollout of its Internet TV service, U-verse, which commands higher bandwidth. AT&T lost about 1,600 DSL subscribers in the most recent 3-month period.

Qwest, Embarq and Windstream all saw declines in their subscriber additions – mostly because they cover territories where the housing downturn has taken its toll. Now even if the remaining companies report the same number of new subscriber additions for the fourth quarter of 2008, the overall broadband additions for the last three months of 2008 will still be down sharply.

Q3 Q4
Comcast 382,000 331,000
Cablevision 32,000 TBA 2/26/2009
Cox 60,000 TBA 03/04/2009
TimeWarner 222,000 124,000
Insight 20,500 TBA
Verizon 225,000 282,000
ATT 148,000 236,000
Qwest 61,000 54,000
Embarq 24,000 24,000
Windstream 28,400 16,000
CenturyTel 21,000 TBA 2/19/09
Total 1.371M 1.06M

Source: Company Filings

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