Tegus sponsored deep dive #1: Cable (part 2: FTTH risk)
yetanothervalueblog.substack.com
This is part 2 of my deep dive into cable threats (sponsored by Tegus). This part will dive into the risk Fiber to the Home (FTTH) poses to cable. If you’re looking for background on what this series is and why I’m doing it, please
Really great article. The one thought that occurs to me is where all this leaves the growth propsects for the core cable businesses of Comcast and Charter. Because they're about 50% penetrated on their footprints currently, as I understand it. So if the end state is 50/50 market share then there's zero growth there. Does that mean all growth comes from pricing/margin improvement? Surely that upside gets capped if in the new world you have a competitor with an equal/superior product, no?
Agree with everyone's comments. Reading this has given me a better understanding cable vs. FTTH than anything else I've read. I just had a quick question on one point:
"Because the housing market is so hot right now, moving is way down, and that means there are less customers to “gain” as they move."
I understand you mention cable backs this claim up by claiming their churn is also at record lows even as net broadband subscriber adds are deteriorating. But...doesn't a hot housing market by definition mean lots of houses are changing hands, and by extension a lot of people are moving?
I just have a red flag going off when management is saying the hot housing market means less people are moving, and that's why their subs are deteriorating. So any further clarity here around this point would be appreciated!
Really great article. The one thought that occurs to me is where all this leaves the growth propsects for the core cable businesses of Comcast and Charter. Because they're about 50% penetrated on their footprints currently, as I understand it. So if the end state is 50/50 market share then there's zero growth there. Does that mean all growth comes from pricing/margin improvement? Surely that upside gets capped if in the new world you have a competitor with an equal/superior product, no?
Great article Andrew!
Agree with everyone's comments. Reading this has given me a better understanding cable vs. FTTH than anything else I've read. I just had a quick question on one point:
"Because the housing market is so hot right now, moving is way down, and that means there are less customers to “gain” as they move."
I understand you mention cable backs this claim up by claiming their churn is also at record lows even as net broadband subscriber adds are deteriorating. But...doesn't a hot housing market by definition mean lots of houses are changing hands, and by extension a lot of people are moving?
I just have a red flag going off when management is saying the hot housing market means less people are moving, and that's why their subs are deteriorating. So any further clarity here around this point would be appreciated!
Great stuff, thanks Andrew! 💚 🥃
Great article discussing the competitve concerns for the cable companies. Thanks for the effort!
Andrew, just wanted to say this was a really excellent article. The best I've seen on in the internet in understanding fiber vs. cable dynamics
Agreed -- super stuff, Andrew. Basically reaffirms FYBR thesis (pending Part 3 notwithstanding?). Thanks!
Really nice work. Thank you.