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Cable Technology Feature Article

June 24, 2009

Cable Digital Voice Growth Slows

By Gary Kim, Contributing Editor

About 34 percent of cable TV executives recently surveyed by Pike & Fischer (News - Alert) researchers are “rather pessimistic” about prospects for acquiring new digital voice customers this year, says Scott Sleek, Pike & Fischer analyst. Those executives expect 2009 growth rates will suffer a big growth slowdown in 2009. Telecom executives, on the other hand, are less pessimistic. About 20 percent of telecom executives say they expect VoIP growth rates to slow in 2009.
To be sure, cable digital voice net additions began to slow in the third quarter of 2008. Where U.S. cable operators added 1.41 million net new customers in the third quarter of 2008, they added 1.26 million net new customers in the fourth quarter of 2008.
In the first quarter of 2009 U.S. cable operators added 919,000 net new VoIP customers. Pike & Fischer expects second quarter additions of 620,000 net new customers and third quarter new net ads of 818,000.
Sleek suggests cable operators now might be running into greater resistance caused by “cord cutting.” Sleek says less than five percent of U.S. households will switch from a traditional telco-provided voice service to some form of VoIP in 2009. At the same time, 11 percent of U.S. households could become wireless-only by the end of 2009.
If Sleek’s analysis is correct, cable voice customers are fewer because more of the potential telco switchers are migrating to mobile services as the replacement for landline voice.
For what it is worth, executives in the consumer electronics and content development industries are even more pessimistic about VoIP prospects. About half of all respondents in both the consumer electronics and content development or distribution industries believe VoIP is the single service most at risk in 2009.
Overall, just nine percent of respondents thought VoIP would be the biggest growth driver in 2009. About 34.5 percent of respondents reported their views that high-speed broadband would be the biggest growth area, while 26 percent said mobile data would be the biggest winner.

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Tim Gray