By Diana Goovaerts
Analyst firm GlobalData forecast cable’s share of the US broadband market will slide in the coming years as fiber and fixed wireless access (FWA) gain ground, but predicted the technology will still account for the vast majority of connections by 2027.
GlobalData’s latest report measures market share by access technology rather than type of operator. Cable’s total market share, including both residential and business connections, is expected to slide from an estimated 67.7 per cent in 2022 to 60 per cent in 2027. Meanwhile, fiber’s market share is expected to grow from 17.9 per cent to 27.5 per cent over the same period, while FWA’s share will climb from 1.9 per cent to 10.6 per cent.
Tammy Parker, a principal analyst at the firm, told Fierce the forecast is based on the assumption that existing cable networks will be upgraded to higher speeds with DOCSIS 4.0 and that cable operators will expand into new markets.
“Cable operators are continuing to engage in aggressive buildout plans,” she stated.
While cable operators will be up against new fiber players flush with private funding and government grants, she noted supply chain and workforce constraints could hamper the explosive fiber growth others have predicted.
“The BEAD funding rules do favor fiber, but new fiber network rollouts will likely be constrained by supply chain issues and shortages of trained labor,” Parker explained. “Additionally, customer signups for BEAD-funded fiber networks will take a while.”
Many fiber players have been talking up their ability to provide multi-gigabit symmetrical speeds as a key advantage over cable. That’s because DOCSIS 4.0 will enable download speeds of 10 Gbps but upload speeds of just 6 Gbps, compared to XGS-PON’s 10 Gbps both ways. And a recent survey found a significant portion of consumers would pay more for symmetrical tiers, especially when operators stress such capabilities in their marketing.
But by and large, Parker said the use cases just aren’t there for most consumers to make symmetrical speeds a top priority.
“Symmetrical broadband speeds are becoming more important as demand for faster upload speeds grows, but they are still not a must-have selling point for most residential customers,” she said. “Future applications, such as immersive AR/VR/metaverse experiences, will demand higher speeds overall than most current applications, but even then it is unlikely that they will require symmetrical speeds as downloaded content will likely continue to dominate the landscape.”
GlobalData’s forecast is the latest to try to sketch out cable’s future as buzz about fiber and fixed wireless grows louder.
A recent report from Kagan tipped cable companies to carry 61.9 per cent of the US residential broadband market by 2026, though it was not immediately clear if this was referencing the companies themselves or the technology used. Earlier this month, Point Topic forecast the number of US broadband subscribers using DOCSIS technology would fall from 80 million at the end of 2021 to just 40 million by end-2030 as fiber assumes a dominant position. And in January, Fiber Broadband Association CEO Gary Bolton told Fierce fiber’s US market share is expected to rise drastically from around 20 per cent currently to become the only market share player over the coming years.
MetroNet and Vexus Fiber investor Oak Hill Capital is throwing its weight behind yet another US fiber player, committing US$250 million to startup Omni Fiber. Led by an executive team comprised of former executives from Frontier Communications, Cincinnati Bell (now altafiber) and Hargray Communications, Omni Fiber is looking to tap into unmet demand for better broadband in small and medium cities across the Midwest.
Former MetroNet VP and GM Darrick Zucco is leading the charge as Omni Fiber’s CEO. He told Fierce the operator is initially looking to hit 250,000 passings using the money from Oak Hill and “other sources of capital.” Specifically, it is looking to build XGS-PON to towns with 1,000 to 20,000 households that generally have one relevant competitor.
“There are several other factors, but our model is to provide competition to monopolies that have high prices and poor service,” he said via email.
To start, work will focus on projects in three states: Ohio, Pennsylvania and Michigan. Asked why it has decided to focus on the Midwest, Zucco said the region “seems to have the best mix of competition, relaxed regulatory environment and cost to build. There are many small towns that are hungry for what we have to offer.”
It’s not the only one that sees opportunity there, though. Brightspeed, a new fiber player which will initially be comprised of Lumen Technologies’ former ILEC assets in 20 states, has already announced ambitious build plans for both Ohio and Pennsylvania. By the end of next year, it’s aiming to reach 170,000 locations in the former and 40,000 in the latter.
Meanwhile, MetroNet, which recently merged with Vexus, has been building out its own footprint in Ohio and already has an expanding presence in both Pennsylvania and Michigan. And Greenlight Networks, another fiber player backed by Oak Hill, is also eyeing moves in Ohio and Pennsylvania.
Zucco acknowledged Omni Fiber does have some concern about overlapping builds, but said “there is enough room for multiple providers in some markets as long as execution is solid.” He added “We believe that staying out of the larger metro areas is a short-to-medium term advantage and has more growth opportunity.”
The CEO has an experienced team alongside him to help implement its plans. This includes former Frontier CTO Steve Gable as Omni’s COO; former Cincinnati Bell COO and CFO Brian Ross as CFO; and former Hargray VP of Marketing and Product Andres Tovar as CRO.
