Wells Fargo Securities analyst Marci Ryvicker says that if cable television operators want to grow their businesses in a hurry, they should start to try and capitalize on their excellent potential in the deliverance of high speed data (HSD) in places where they are already doing business. She calls it the “potential upside of a ‘naked’ HSD.”
“It is our belief that cable operators are the best and broadest providers of high speed data,” says Ryvicker, “yet they do not do a great job of marketing across their footprint – especially to homes passed but not served.”
She continued, “Cable’s HSD advantage stems from its pipe and the lack of competition. When compared to the video market, HSD is less mature and less competitive. For one, broadband penetration in the U.S. is still relatively light, at 63.5%, compared to other countries – which mean plenty of upside. Second, while there is competition from fiber, DSL and dial-up, we point out that 1) the latter two are clearly inferior in speed and service and 2) both AT&T and Verizon are nearing the end of their build outs, which leaves 60% of this country unable to even choose broadband via fiber.”
She notes that Comcast, Time Warner and Cablevision could all reap substantial benefits by adding just 20% of unserved homes that they already pass as subscribers to standalone HSD offerings.
RBR-TVBR observation: We have absolutely no objection whatsoever to cable companies finding great new revenue streams. If HSD can help make them fat and happy, maybe they won’t be so Scroogy when it comes time to talk to broadcasters about retransmission fees.