Top 10 Broadband Carriers Compete: DSL Kicking Tail

If you scour publicly available financial statements from the largest broadband carriers you can uncover the gross number of subscribers each claims, and you can determine if the base of customers has changed by looking at these reports over different points in time.  For an investor that might be useful to get a sense of total market share; for an executive at the carrier that same reported number might make you feel good (or bad).  However, there isn’t a ton of insight you can draw from this information to help guide market strategy.

So to investigate market share at a much more granular level, we tapped into The BroadBand Scout Database* and narrowed our investigation to the top ten broadband carriers in the United States for the purpose of understanding how their market share has shifted in comparison to one another.  While their overall subscriber base may have increased or decreased, this view compares them against each other.  Here are the topics we cover in this brief study:

  • Overall Comparative Market Share
  • Share Shift by U.S. Region
  • Head-to-Head Competition

As we go through the results, please keep in mind that all comparisons are made within the scope of Top 10 Carriers only (which covers about three-fourths of the total market).

Overall Market Share
Figure 1 below displays the market share for each of the top 10 carriers for two points in time:  Q3 2012 and Q3 2014.   There are some notable observations we can make just from this simple chart:

  • Of the top 10 carriers, half are DSL providers and half are cable providers
  • The top five carriers account for about 80 percent of the total share among the top ten
  • Although there is clearly share shifting occurring, the relative ranking of all 10 carriers remains as it was two years ago

Figure 1:  Overall Comparative Market ShareTop 10 Comparative Market Share

As we look a little closer, we observe that only three carriers have gained share in the last two years; CenturyLink is the biggest winner, followed by Windstream and then AT&T.   These carriers that have gained share all use DSL technology to deliver their broadband service to their customers.  For the glass-half-empty crowd, we will explicitly state that the cable providers are all losers.

Share Shift by U.S. Region
Figure 2 shows the market share shift of each carrier as a percentage change, either positive or negative.  For instance if a carrier had a 20 percent share two years ago and increase their share to 22 percent, then their change in share would be 10 percent  (22% / 20% = 10%).

Figure 2: Top 10 Share Shift by RegionTop 10 Share Shift by Region

We have also organized the chart so that the DSL providers are grouped together on the top and the cable providers are grouped together on the bottom.  By doing a quick visual inspection of the chart, it is clear that certain DSL providers are doing very well across all regions they serve—AT&T, CenturyLink, and Windstream. The remaining DSL providers, Verizon and Frontier, are experiencing mixed results.

On the other hand and on the bottom half of the chart, the cable providers are losing share across regions with rare exception.  It’s worth noting that Comcast, the overall market share leader, is on the wrong side of the graph in all regions—granted, when you are on top, it’s more difficult to gain share than lose share.

Head-to-Head Competition
The BroadBand Scout Database allows us to see where customer switching behavior occurs at a carrier level.  We track consumers and can determine when they move from one carrier to another and then we can see how many consumers each carrier gains versus how many are lost—from this, we can then calculate the net change against individual competitors.  Figure 3 below is a scoreboard of head-to-head competition of the DSL providers vs. the cable providers.  The orientation is from the perspective of the DSL providers, so when looking across a row we can see how each DSL competitor compares against each cable competitor (in markets where they have a minimum level of overlap).  So from a DSL provider’s perspective, green indicates that the carriers took more customers from that competitor than they lost to that same competitor.  If the box is red, that is indicative of a net loss of customers to a cable competitor. The brighter the color, the more they won or loss.

Figure 3:  Competition Heat Map:  DSL versus CableCompetition Heat Map

There are three DSL providers that are winning across the board (the rows are all some shade of green).  That means AT&T, CenturyLink, and Windstream are gaining share against all of the top cable providers.  DSL technology by itself does not guarantee success as we can see with Frontier losing against all cable providers and Verizon is experiencing only mixed success.

Summary and Conclusions
When limiting the analysis to the Top 10 National Broadband Carriers, there is no change in relative market share ranking since Q3 2012—meaning that they still land in the same order in the standings.   The number of overall broadband customers has increased over the past two years due to deploying broadband to previously unserved markets and acquiring brand new Broadband customers in existing markets.  As we have seen in this study, there have been changes in overall market share for the major carriers–DSL providers are the only winners while cable providers have all lost relative share.

It is also evident that looking at overall share masks the complexity of consumer switching behavior that we uncover when we look even a little beneath the surface.  The competitive landscape is complex and share shifts vary dramatically by region.  Finally, the carriers are not fighting in a vacuum, they are fighting with each other to win share one customer at a time.  Winning this battle for customers requires data and insight to guide the strategies required to effectively compete.

* The BroadBand Scout Database is comprised of over a billion internet transactions that link consumers’ physical addresses to their specific broadband provider. The database is freshened on a frequent and periodic basis, allowing for the tracking of provider-level usage, technology adoption, and carrier market share shift.

Written by Adam Elliott
ID Insight President, Co-Founder
Adam has a passion for creating data-driven solutions that produce positive and measurable business results. A recognized name in the analytics area, Adam has won numerous awards for marketing and training, including “Minnesotans on the Move,” the Gold Award at the Houston International Film Festival for analytics training and an award from the American Marketing Association for leading the creation of the largest B2B Webcast in Yahoo’s history. When he’s not inventing new products, he’s on the ice coaching his daughter’s hockey team.

Date Posted: December 3, 2014 Author: Adam Elliott Category:   Featured, IDI Blog

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