STRATEGY ANALYTICS: Broadband Service Providers Face Dramatic Decline in Q2 New Subscriptions

Business Wire, August 6, 2008

Seasonality, Lean Economic Environment to Blame

BOSTON -- Broadband Service Providers witnessed a dramatic decline in the number of net new subscriptions in the second quarter of 2008, according to Strategy Analytics. While seasonality and market maturity explain some of the phenomenon, the operators' just-reported second quarter results point to other factors.

According to John Lee, Analyst in the Strategy Analytics Multiplay Market Dynamics Service, "There is a fair amount of seasonality in broadband, so a dip in the second quarter is not altogether unexpected. However, the magnitude of this decline suggests that the current economic environment is hampering the ability of service providers to garner new customers."

Each of the top four US service providers, Comcast, AT&T, Verizon and Time Warner Cable, saw its number of net new subscriptions fall precipitously in the second quarter, with the cable companies faring slightly better than the Telcos.

"This is not a situation where existing consumers are dropping broadband en masse," said Ben Piper, Director of the Strategy Analytics Multiplay Market Dynamics Service. "Rather, the number of new subscribers is dwindling. In lean economic times, people are less inclined to assume an additional recurring monthly expense."

Strategy Analytics' upcoming report, "Broadband Service Provider Benchmarking: North America Q2'08," tracks quarterly subscriber growth trends for the 26 leading broadband service providers (BSPs) operating in the United States and Canada.

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