Kagan: U.S. Broadband Market Continues to Grow

The U.S. is still experiencing robust growth in fixed broadband connections, driven predominately by the cable market, according to a new report published this week.  Meanwhile, download speeds are increasing faster than expected due to cable companies and new telco FTTH deployments.

U.S. broadband gains illustrated durable demand for wireline connections in the second quarter, allaying fears of a 2021 hangover, according to Kagan, a media research group within S&P Global Market Intelligence. While the 945,000 new broadband subs in second quarter 2021 fall short of the year-ago boom, that increase far exceeds the second-quarter 2019 figure that cable operators have been pointing to as a more likely template for current-year success.

The combined residential cable, telco and satellite broadband subscribers topped 109.2 million at the end of the second quarter, up 4.3% annually with nearly 4.5 million net adds year over year, according to Kagan’s full industry estimates.

The U.S. broadband market soared in the first half of 2020 as Covid-19 drove working from home to new levels and customers felt the need for more reliable – and faster – Internet connections. Kagan last year noted that the number of residential wireline subscribers with a broadband service of 100 Mbps or more increased by 5.5% in the first six months of 2020, compared with end-2019.

Additional takeaways from Kagan’s Q2 2021 report:  

  • Cable subscriber growth in the first half was down from the outsized gains of the pandemic-boosted demand for connectivity. But with 1.9 million residential and commercial net adds year-to-date, cable accounted for 96% of broadband customer gains across the U.S. cable, telco and satellite segments in the first six months of 2021.
  • The surging enthusiasm for FTTH upgrades is boosting telco wireline broadband net adds, albeit at relative magnitudes. While the segment’s residential net adds in the second quarter pale in comparison to cable’s growth, it represents a dramatic improvement over the second quarter track record since 2016.
  • Combined, the established satellite broadband providers lost 24,000 U.S. subscribers while Starlink begins to establish early momentum.

Kagan declined to share figures for growth in net broadband additions for Q2 last year, simply stating that the 2021 numbers “fall short of the year-ago boom.” However, Q2 this year was far ahead of the same period in 2019, which it – and the industry itself – would serve as a more accurate benchmark for future growth. In the second quarter of 2019, wireline broadband net adds came in at 339,000.

The overall residential broadband market in the US reached 109.2 million subscribers at the end of June, an increase of 4.3% year-on-year; net adds over the 12 months hit nearly 4.5 million. Again, Kagan did not provide comparative figures. As per the above chart, residential broadband penetration is now above 83%, rising to 84.5% if satellite broadband is included.

The cable companies are still leading the U.S. broadband market. 1.9 million net additions in the first half of the year across the residential and commercial sectors give cablecos/MSOs a 96% share, leaving the telco and satellite providers sharing the remaining 4%, or just under 80,000 customers.

With the satellite broadband companies together losing 24,000 customers over that period, that means the telcos probably signed up at least 100,000 new customers in the first half of 2021.

The Need for Speed:

As of June 30, Kagan estimates that 78.4% of residential wireline subscribers took download speeds of 100Mbps and above. With speed and bandwidth at the forefront of consumers’ minds, the 1Gbps tier logged the largest increase.

Subscribers taking 1 Gig or higher rose to an estimated 7.8% of the residential broadband universe in the second quarter of 2020, up from 4.3% at year-end 2019.

The under 25 Mbps tier fell to 2.7% of wireline broadband households or 2.8 million subscribers for whom slower speeds likely impeded in-home online activities, including entertainment, during the pandemic. The telco sector, still somewhat held back by legacy copper systems, accounted for the vast majority of the lower end speed category, with an estimated 87.2% of all wireline broadband subscribers in the below 25 Mbps category.





One thought on “Kagan: U.S. Broadband Market Continues to Grow

  1. The U.S. now has more than 107.4 million broadband subscribers, an increase from 102.7 million subscribers from a year ago. According to Leichtman Research Group, the largest cable and wireline providers in the U.S. acquired about 890,000 net additional broadband internet customers in the second quarter, which is a decrease from the pro forma gain of about 1,260,000 subscribers in the second quarter of 2020.

    Cable still has the majority of broadband customers with about 74.7 million subscribers. Cablecos added about 840,000 customers in the second quarter.

    Telcos have about 32.7 million broadband customers nationwide and added about 50,000 broadband customers in the second quarter, compared with a net loss of about 140,000 subscribers in the second quarter of 2020.

    “Net broadband additions in the second quarter of 2021 were the most in any second quarter in the past decade, except for 2Q 2020,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc. “Top broadband providers added 8,000,000 subscribers over the past two years, including about 4,330,000 net adds over the past year, and about 3,670,000 net adds over the prior year.”

    Comcast is still the largest provider of broadband services with 31.3 million broadband subscribers as of the end of the second quarter. The company had 354,000 net broadband adds in the second quarter.

    Charter trails Comcast in a close second place with 29.6 million broadband customers at the end of the second quarter. The company added 400,000 net broadband additions in the quarter.

    On the telco wireline side, AT&T leads with 15.48 million broadband customers at the end of second quarter. The company added 46,000 net adds on the second quarter. Verizon follows with 7.26 million broadband subscribers in the quarter. Verizon added 70,000 net adds in the second quarter.



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