After reviewing quarterly broadband numbers for Verizon and AT&T, you could walk away thinking it was an “okay” quarter. In the context of net broadband adds – not particularly great, but not terrible either. It could be better, but you can live with it. That is until you look at Comcast’s numbers.
Consider Comcast added 449K broadband subscribers in 1Q12. That outpaces Verizon and AT&T combined. By a longshot – over two to one. Verizon added 104K broadband customers and AT&T added 103K, for a combined total of 207K. And this is not a freak occurrence. Comcast has beat both AT&T and Verizon in net broadband adds on several occasions. And that doesn’t even count cable broadband adds from Time Warner Cable and other tier 1 cable companies.
If the future of the business is broadband, then cable seems to be kicking butt. Luckily, both Verizon and AT&T have wireless as their savior. In the context of wireless, there is absolutely no competition. The cable industry has tried on a few occasions to get into wireless, and failed miserably by most accounts. They have basically thrown in the wireless towel, and are now hitching any wireless aspirations to a Verizon Wireless partnership model.
This brief analysis leads me to this post’s title question, is it possible to do both well – wireless and wireline broadband? It seems like the cable industry has come to the conclusion that they can’t do wireless well, so they’re leaving it to partners. Meanwhile, the cable industry is performing exceptionally well on the wireline broadband front.
Both Verizon and AT&T are attempting to do both. They clearly are doing better with wireless, leading some to question their wireline future, particularly Verizon. It seems Verizon has lost interest in DSL and by partnering with the cable industry to resell cable broadband services, some even question their long term commitment to FiOS.
For AT&T, 51% of their total consolidated revenue now comes from wireless services. They sold over 5.5 million smartphones last quarter. Wireless broadband and its growing contribution to revenue and profit is the highlight of their earnings announcements. You could argue that AT&T is a wireless company with some wireline assets – dwindling wireline assets I might add.
Is it possible for large conglomerates like these to maintain focus on both? The cable industry has decided no. Will AT&T and Verizon follow?
We have seen several smaller companies split wireless and wireline units into separate companies. Alltel, a former combined wireline and wireless company is now a wireline only company in Windstream, with its wireless assets bought up by larger companies. Sprint took the opposite approach, divesting most of its wireline assets, which are now largely a part of CenturyLink.
Even smaller companies are following this path. nTelos split itself in two recently, with the wireline portion of the company rebranded as Lumos Networks. SureWest sold off their wireless network several years ago to focus solely on wireline broadband.
There certainly are a number of companies who do both wireline and wireless broadband and will continue to do so for some time. But can they do both well?
Image courtesy of flickr user Sean MacEntee.