MONTEREY, Calif. – With cable operators riding a wave of investor optimism over their accelerating rollout of voice over IP telephony and the accompanying halo effect on basic subscriber retention and overall revenue per subscriber, growth looks good for cable companies right now and into the future, says a report from Kagan Research.
Some of the highlights of the report – which is about U.S. MSOs – include:
* Cable IP voice homes marketed will leap from 31.2 million at the end of 2005 to an estimated 68.7 million by year-end 2006;
* Cable IP voice subs have gone from 600,000 at year-end 2004 to 2.6 million at year-end 2005, and are forecast to jump to 6.5 million by year-end 2006.
* High-speed data penetration of basic video subscribers hit 39% at year-end 2005 (vs. 32% at year-end 2004) and is expected to grow to 45% by year-end 2006.
* Digital cable subs now surpass 30 million, based on a projected increase from 28.6 million at year-end 2005 to 31.6 million at year-end 2006.
* In 2006, total residential revenue is expected to grow 9.6% to US$68.2 billion, at an average ARPU of US$87.04 (vs. the US$79.42 of 2005).
* By 2015, cable’s residential revenue should hit US$119.8 billion
"The industry continues to consolidate," says the report, "with Comcast and Time Warner having completed their acquisition of Adelphia Communications. The top 10 MSOs, pro forma the deal, will own or control 90% of the nation’s cable subs, and many clustering benefits in major metro areas have yet to be realized.
"These include the exploitation of the potential of interactive advertising, greater telephony efficiencies, increased penetration into businesses, better marketing economics, and a rationalization of operating costs."
Says Robin Flynn, Kagan senior analyst: "These factors, along with the continued growth of core businesses, will combine to push cable residential revenue to $119.8 billion by 2015, of which just 41% will be delivered by basic cable, vs. 47% in 2006."
