Spot the difference - cable and telco revenue mixes converge
Once very distinct types of companies, cable operators and telecommunications groups are growing increasingly indistinguishable - at least in the fixed market - as bundling and product upsell heads towards its natural conclusion.
In 2005, the average cable company made 76% of its revenue from subscription television products - just 24% was derived from either broadband or telephony subscriptions. By the end of 2017, the mix between TV and non-TV revenues will have reached nearly 50:50 - with broadband (helped by cable's natural speed advantage over DSL) rapidly closing on TV. By contrast, back in 2005, fixed telephony filled the 'TV role' for telecoms groups, representing 71% of telco retail revenue (75%+ once recent acquisitions of satellite TV providers such as DirecTV are excluded). By the end of 2017, we expect that the contribution of fixed telephony will have dropped to less than a third of overall telco fixed retail revenue. TV has risen to near parity, and Ampere expects that within three years will be a more important business for telecoms groups than fixed phone.
At this point - and aside from the obvious network-level distinctions - the main difference between telcos and cable companies will lie outside the fixed sector, in mobile telephony, an area that cable companies are increasingly turning their eyes to.
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