Q2 UCable up to 64% of the market. For a decade, telcos held on to 45% of the market in the U.S. But AT&T and Verizon haven't upgraded almost half their lines, planning to go wireless only to 10's of millions of homes. (One network is cheaper than two.) The other U.S telcos have done even less, keeping dividends far higher than earnings and skimping on capex.

Customers are fleeing DSL networks that often are ten and fifteen years old. The U.S. has cable to 92%, with most offering 50 megs standard. Comcast's primary offering is 100 megabits and they just extended a gig of DOCSIS 3.1 to Boston and Philadelphia. Frontier lost 101,000 subs and Century 77,000. Verizon's once world-leading fiber network wasn't  to prevent a loss of 23,000 customers. The saddest story is AT&T. They have added 5M lines of fiber the last two years and spent $67B on DirecTV, seeking an expanded customer base. Despite that, they lost 9,000 customers. 

That's a rounding error but AT&T should have been growing. Charter is up 267K on the quarter and Comcast 175K. Overall, 230K added broadband. Overall, U.S. wireline growth is less than the population increase. There is a minor erosion to wireless, probably 5-10% of households.

"CenturyLink, Frontier, Windstream suffer worst 3 quarters in history," Sean Buckley writes. Both Century and Frontier have added superb engineers but the financial problems give them few options. Century has lost 20% of their market value this year in an up market. The Level 3 deal is on very favorable terms, but a dividend cut is inevitable. 

Frontier has gone down 80%. The market cap is $945M despite ~$8B in sales, a level implying many on Wall Street believe bankruptcy is imminent. I disagree. Their financials suggest they can hold off for several years, although that may not be a wise move. Both companies should have suspended dividends a few years ago if they weren't de facto liquidating.

In Canada, England, and France, telcos are beating cable.

Data from Bruce Leichtman, who has been highly accurate in the past. 



Cable's Market Share vs. Telcos Expands to Highest Level Since 2004

Durham, NH -- August 18, 2017 -- Leichtman Research Group, Inc. (LRG) found that the fourteen largest cable and telephone providers in the US -- representing about 95% of the market -- acquired about 230,000 net additional high-speed Internet subscribers in 2Q 2017.

These top broadband providers now account for over 94.1 million subscribers -- with top cable companies having 59.9 million broadband subscribers, and top telephone companies having 34.2 million subscribers.

Findings for the quarter include:

  • Overall, broadband additions in 2Q 2017 were 107% of those in 2Q 2016
  • The top cable companies added about 460,000 subscribers in 2Q 2017 -- 84% of the net additions for the top cable companies in 2Q 2016
  • The top telephone companies lost about 230,000 subscribers in 2Q 2017 -- compared to a loss of about 340,000 broadband subscribers in 2Q 2016
  • Each of the top Telco providers had net broadband losses in 2Q 2017
  • Over the past year, there were about 2,550,000 net broadband adds -- compared to about 3,000,000 over the prior year

"Cable companies added about 3.1 million broadband subscribers over the past year, while Telcos had net losses of about 550,000 broadband subscribers," said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc. "At the end 2Q 2017, cable had a 64% market share vs. 36% for Telcos. The broadband market share for cable is now at the highest level it has been since the first quarter of 2004."

Broadband Providers Subscribers at End 
of 2Q 2017
Net Adds in 
2Q 2017
Cable Companies
Comcast 25,306,000 175,000
Charter 23,318,000 267,000
Altice 4,004,000 2,000
Mediacom 1,185,000 6,000
WOW (WideOpenWest) 727,600 (1,400)
Cable ONE* 521,724 (1,603)
Other Major Private Company** 4,845,000 15,000
Total Top Cable 59,907,324 461,997
Phone Companies
AT&T 15,686,000 (9,000)
Verizon 6,988,000 (23,000)
CenturyLink 5,868,000 (77,000)
Frontier 4,063,000 (101,000)
Windstream 1,025,800 (21,800)
Cincinnati Bell 307,100 (300)
FairPoint^ 304,193 (1,160)
Total Top Telco 34,242,093 (233,260)
Total Top Broadband 94,149,417 228,737


April 18

“My three biggest customers are marching to 7 and 5 nanometers.” Lip-Bu Tan. Moore’s Law ain’t dead yet.

Eric Xu, current Huawei Chairman, said consumers would find no “material difference between 4G & 5G.” Dozens of top engineers agree the "5G Revolution" is hokum, including  DT CTO Bruno Jacobfeuerborn, FT/Orange SVP Arnaud Vamparys, and BT CEO Gavin Patterson.
     Politicians and marketers pushed b_______. What’s coming for 5-10 years is good for telco capacity but otherwise disappointing. Unfortunately. 
     On the other hand, mmWave & Massive MIMO are improving at a ferocious rate, advancing telco capacity enormously. Massive MIMO has made it practical to use 3.5 GHz frequencies, a second remarkable booster. The "5G Revolution" is dead; Long Live the real 5G and advanced wireless!
U.S. attacks on Huawei and ZTE look to be an historic disaster.

China’s logical response is to invest to become independent of the U.S. They already have $100B on the table for memory chips and are rumored to add another $100B. Huawei/HiSilicon already holds their own against Qualcomm and everyone else in the world. 
    Zeng Xuezhong of Spreadtrum, world #3 mobile chipmaker, confirms: China will “speed up the chip R&D investment that is self-controlled and self-researched. We must never forget to make it bigger and stronger.”
     U.S. warships patrolling China’s seas inspire security fears. So does Trump’s threat to a country on China’s border."Military solutions are now fully in place, locked and loaded, [for] fire, fury and frankly power, the likes of which the world has never seen before.”
     China would be stupid not to have domestic capacity just in case. The Chinese leadership is not stupid.
The year's best wireless conference is next week. Ted Rappaport, Sandeep Rangan and colleagues bring the world's best engineers to the Brooklyn 5G Conference Summit. This year, Paulraj, Onoe, Fettweis, Katabi, and their peers are coming. Do not miss the webcast, http://bit.ly/2HuOKqW .

April 10

A special report: Who Are The Three Billion? The Color Of The Net Has Changed http://bit.ly/netcolor
1/3rd wireless only, 2/3rds in Global South, 75% not native English speakers.