Rising D2C Video Businesses To Push Faster Broadband Subscriptions

Premium TV streaming services will continue to encourage broadband distribution -- especially cable broadband and new faster telco-fiber broadband services.

UBS says total broadband subscribers -- cable and telco-based services -- are estimated to grow 3.6% in 2021 (3.9 million subscribers) this year.

This comes from 3.2 million cable broadband and 700,000 telco subscribers. A year ago, the COVID-19 pandemic fueled rising broadband growth by 4.5%, adding some 4.6 million new broadband customers.

Leichtman Research Group estimates total U.S. broadband subscribers hit 105.8 million for fourth-quarter 2020.

“Broadband's utility will grow with rising traffic as D2C [direct-to-consumer] video alternatives proliferate and the number of connected devices per home grows,” writes John Hodulik, UBS media analyst.



In particular, after several years of declining telco-fiber subscribers, UBS sees an improvement in business -- projecting a modest 2.2% rise.

Hodulik notes rising telco-fiber business starts from several telco providers, including AT&T -- especially coming from new higher-performing and faster telco-fiber rollouts.

He says this will raise fiber availability to 40% to 45% of U.S. households, compared with 30% today.

UBS estimates new faster telco-fiber will hit 25 million subscribers in 2025. Currently, there 18 million low-speed telco-fiber subscribers, and this is trending to drop to just under 10 million by 2025.

Hodulik says the Biden Administration’s $1.9 billion American Rescue Plan Act passed in March, and the promise of another $2 billion infrastructure plan, are key in helping boost broadband spending. “The U.S. broadband market is on the cusp of unprecedented stimulus.”

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