Cable's VoIP growth engine is sputtering

Pay TV cord-cutting--or tier-shaving, if you prefer a less threatening notion--may be the negative trend most on the minds of cable TV providers these days, but the major cable TV players may now be showing signs of slowing progress in the consumer VoIP market. Consumer VoIP services, including those offered by the telco giants, are continuing to show healthy adoption, but growth of cable VoIP has been slower according to a report at Network World.

Comcast has the most VoIP lines among cable TV players, with almost 9.3 million VoIP lines in service as of the end of the third quarter. That figure puts its penetration rate for VoIP at about 17.6 percent, up from about 16.1 percent a year earlier. However, other cable TV companies saw much slower progress during the same period.

The penetration rate for Charter Communications (Nasdaq: CHTR), which has 5.3 million VoIP lines, is about 16.3 percent as of the third quarter, only slightly higher than its 16.1 percent penetration rate after the third quarter of 2010. Meanwhile, Time Warner Cable (NYSE: TWC), which has 4.6 million voice customers, added only 5,000 new VoIP lines overall in the third quarter this year, with business market growth of  13,000 lines covering for the loss of 5,000 residential line losses.

The effect of Verizon Wireless' (NYSE: VZ) acquisition of wireless spectrum owned by the cable TV companies is still being sorted out, but with wireless being the main substitute for customers as they turn away from wireline voice options, the deal could prove to be very timely for cable TV providers in need of a way to revive their voice offerings. If they can't grow broadband-based VoIP, then maybe it's time to invest more in wireless voice.

For more:
-see this Network World report

Related articles:
Comcast and Time Warner Cable sold spectrum to Verizon
Cable players have been fighting VoIP outage reporting requirements

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