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Media

Tough Days For Verizon And Comcast: Broadband Growth Slows

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By Douglas A. McIntyre Published
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Verizon (VZ) and Comcast (CMCSA) along with all of their other telecom and cable friends have been hoping that the broadband growth party would never end. VZ has put $23 billion into its FiOS fiber-to-the-home project, and CMCSA is counting on rising digital cable and VoIP demand to keeps its revenue moving up.

CIBC says that sharp increase in broadband households that has shown up in quarterly earnings for the past several years is about to end. According to Briefing.com, US broadband growth will slow in 2008 and get worse in the years after that. The reasons the firm gives are that about 30% of households do not use the Internet, migration of value oriented dial-up subscribers is set to get more difficult, and incremental infrastructure upgrades have stalled around 85% coverage.

This means that VZ, CMCSA, AT&T (T), Time Warner Cable (TWC) and their smaller rivals will be faced with taking business from one another instead of from a growing base. If the broadband market is like all others, slowing growth means more price competition and lower margins.

The broadband business may be about to get worse.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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