The Convergence Consulting Group Ltd. recently released its October 2006 “Battle for the North American Couch Potato: Bundling, Internet, TV, Telephone” report, which covers the United States and Canada.
In the report, the group forecasted that cablecos will have 8 percent (9.1 million) of residential telephone subscribers by the end of 2006 and 24 percent (24.5 million) by the end of 2009, up from 5 percent in 2005. The group also forecasted RBOCs/telcos will have less than 1 percent (570,000) of TV subscribers by the end of 2006 and 6 percent (6.5 million) by the end of 2009. Overall RBOC residential wireline telephone line loss in 2005 was approximately 8 percent, and the group forecasted 9 percent for 2006.
In addition, the top cablecos have on average 45 percent of their TV customers taking Internet with them, whereas the RBOCs have on average 25 percent of their residential telephone customers taking DSL/fiber Internet access with them.
The report also predicted that Verizon's fiber approach and pricing strategy will not be completed until the next decade. It also expressed uncertainty as to whether AT&T Inc.’s and BellSouth Corp.’s current capex commitments to network upgrades will be enough to satisfy the capacity needs in the long run of offering multiple HD streams and higher speed Internet access.
Overall cable basic-subscriber losses slowed in 2005 and the report forecasted cable will gain a small amount of basic subscribers in 2006, while losing a minor amount in 2007 – the Adelphia acquisition will help stem losses, the report concluded. Losses are expected due to TelcoTV in 2008-2009. Digital subscriber additions will continue to be progressively better. And DirecTV/EchoStar will continue to see less subscriber gains, due to price rises, focus on churn, increased competition from cable and the entrance of RBOC TV.
Further projections include 68.1 million cable TV subscribers to 29 million satellite TV subscribers; 2006 TV subscriber revenue of $69 billion, up 9 percent over 2005; 18.6 million DVR and 12.7 million HD subscribers in 2006; and $1.5 billion in VoD/SVoD revenue in 2006.
In the near future, studios, MySpace.com, Google Inc., Apple Computer Inc., etc., will have no monetary impact on RBOCs, cable and satellite. However, these players do pose a threat in the long run.
The group also forecasted cablecos will continue to add more residential broadband subscribers per annum than the telcos for the rest of the decade. In addition, it forecasted year-end 2006 cable at almost 60 percent of the residential subscriber broadband market, although it is expected to decline to 55 percent by the end of 2009.
The report also projected 31 million residential cable broadband subscribers to 21 million residential RBOC/telco broadband subscribers by the end of 2006. It also projected more than $24 billion in residential broadband revenue in 2006, up 29 percent over 2005.
The Convergence Consulting Group Ltd. www.convergenceonline.com
