Competition heats up for television/video service
by April 13, 2009 2:04 pm 61 views
The hope for more competition among television service providers was voiced during a recent franchise dispute between the city of Fort Smith and Cox Communications. That hope might be a reality.
In late December, AT&T began providing television service — either through fiber optic cable or AT&T’s arrangement with Dish Network — in the Fort Smith area through its U-verse system. During the time AT&T was rolling out the U-verse service in Fort Smith, the franchise dispute between Cox and the city was heating up, with Fort Smith Mayor Ray Baker vetoing a franchise agreement extension. The matter was eventually resolved, but Baker remained vocal in his desire to see competition in the television provider market.
A recent report from Fitch suggests that competition between telephone companies and the traditional cable providers is here.
Fitch noted in an April 6 report that fourth-quarter 2008 revenue in AT&T’s broadband and U-verse video service was 26% of the company’s consumer-in-region (regions were the service is provided) revenues, and was up 21.4% over the same period in 2007. A similar product from Verizon (FIOS) saw revenue growth of 42% on a year-over-year basis.
“Video subscriber addition momentum during 4Q’08 clearly shifted away from the large cable multiple system operators (MSOs) to AT&T, Verizon and DIRECTV,” Fitch noted in the report.
The report noted that the largest cable operators lost 427,000 basic subscribers in the fourth quarter of 2008, up from a loss of 216,000 subscribers in the fourth quarter of 2007. AT&T, Verizon and DIRECTV added approximately 868,000 new video subscribers during the fourth quarter.
“The deteriorating economy and intense competition for new video subscribers have translated into slower growth of new customers and slower overall revenue generating unit growth for the cable MSOs,” according to Fitch.
Advising that market penetration and subscriber info “are closely held data for competitive reasons,” Cox spokeswoman Kelly Zega would not discuss cable market share in the Fort Smith area.