Recent broadband speed increases combined with price cuts
Recent broadband speed increases combined with price cuts should cause investors to “rethink how comfortable they are” with the future outlook for cable broadband, said BTIG analyst Richard Greenfield in a report to investors Thursday. Cablevision announced faster broadband and…
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price drops this week, Greenfield said. “The magnitude of the cuts is concerning,” and shows that Cablevision is “under increased stress to attract and retain broadband customers,” Greenfield said. “Will cable operators over the next five years be forced to significantly raise speeds, while maintaining or even lowering prices, diminishing the margin leverage we currently see in their broadband product?” asked Greenfield. He said Cablevision’s price changes and speed increases are intended to compete with Verizon FiOS, but they could still indicate a trend. “We wonder how Google Fiber’s continued rollout will impact cable broadband [average rate per user], if MSO’s feel the pressure to raise speeds while lowering prices,” said Greenfield. However, he also said faster, cheaper broadband could be a good thing for high bandwidth services such as Hulu and Netflix. Cablevision’s speed increases are on the uplink side, Greenfield said, and that “bodes well for video conferencing, video sharing and piracy.”