Cable Still Dominates Telcos, But Broadband Growth is Slowing

That there is less growth this year than previously is unsurprising. There is a growth curve to represent market penetration for just about any product/service. Typically, growth starts out slow, but accelerating until it reaches about 10% market penetration.

From there, it grows rapidly until it reaches about 90% market penetration. The last stage shows much slower growth at a decelerating rate. The tragedy, in this case, is how many PoPs are getting left out, when compared to POTS service.

POTS never did reach 100% of all homes and businesses. However, with subsidies and regulation, the number of unserved dwellings reduced to a tiny fraction of 1%. Essentially, everywhere that had power also had phone service.

The more remote locations obviously weren’t profitable, which is exactly why the subsidies were in place.

In the absence of regulation, Internet providers seem uninterested in reaching those remote location, even with subsidies. Broadband availability outside city limits is shockingly low and the incumbents are only interested in expensive (and profitable) wireless technologies to “fill the gap”. Yet, they don’t even fill in the coverage gaps very far from major highways!

Essentially, they have placed an artificial cap on the market size.

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