Cable in the catbird seat

A Yankee Group study released today confirms what many of us have suspected. There is a land grab taking place in the consumer broadband market, and the results will have ramifications for years to come.

And because the race is already afoot and will essentially be run over the next three years, the cable companies have established themselves as clear favorites.

What Yankee set out to do was to quantify the real market for triple-play services. The study, “Defining the Opportunity Market: A Study of the Annual Revenue Opportunity for Residential Broadband Service Providers,” broke down the number of households “in play” each year. Counting those that move, those that create new households, and those that leave one service provider for another, the study found that about 32 million to 35 million households will make broadband decisions each year for the next three years.

After that, though, the numbers drop off considerably, based on the reality that customers who buy more services churn less often. Since cable has a clear advantage in having its own triple-play services available now, that industry seems best positioned for the three-year sprint to success.

It’s certainly not a done deal, but this period of intense competition is coming at a time when the telcos are still engaged in integrating major mergers and trying to manage broadband buildouts. Neither of those things are working in their favor.

As Aditya Kishore, director of The Yankee Group Media & Entertainment Strategies, points out, AT&T is trying, with its HomeZone, to also tie its satellite partnership with DISH more tightly into its service bundle. AT&T and Verizon can also play the wireless card, while smaller telcos are moving quickly to offer their own IPTV services and build on strong customer relationships that cable can rarely duplicate.

A year from now, it will be interesting to see if the Yankee numbers are holding true, and which of the two major competitors has succeeded in landing the biggest portion of the biggest market the industry is likely to see for some time to come.

E-mail me at CWilson3@telephonyonline.com.