Will Cable Operators Double Broadband Prices? Analyst Says Yes

Have you and your colleagues been considering raising broadband prices at some point in the future? If so, you’re not alone.

Just recently, Fierce Cable ran a story arguing that broadband prices could be in for a sharp spike over the next several years. In fact, according to industry analyst Jonathan Chaplin, prices could eventually double.

Chaplin believes that higher prices could be implemented to offset losses from broadband saturation, as well as from the erosion of linear pay-TV services.

As Fierce Cable explained, ISP growth for MSOs actually fell both quarterly and yearly during 4Q16, at 6.4 percent and 6.9 percent, respectively. What’s more, net additions for high speed internet customers in the cable industry also fell year-over-year from 3.840 million in 4Q15 to 3.783 million in 4Q16.

Over the long term, Chaplin thinks that cable operators will have a strong advantage that will help them capture the majority of high speed Internet additions. At the end of 2016, cable operators controlled 65 percent of the U.S. broadband market. This figure could swell to about 72.2 percent by as soon as 2020.

“Our long-term penetration forecast is predicated on cable increasing its market share, given a strong network advantage in 70% of the country (this assumes that telco fiber deployment increases from 16% of the country today to close to 30% five years from now),” Chaplin stated.

What are your thoughts on Chaplin’s predictions? We would love to hear more about your long term predictions for the industry. Let’s continue this conversation below.