Telco Revenue Sources Have Changed Faster than Cable TV

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Revenue sources really are changing in the U.S. access provider market. Whether that is a good thing or a bad thing is the issue. Cable operators might argue the persistence of video as the dominating revenue category is a good thing, as it shows ability to protect its market.

Telcos might argue that their more-rapid ability to replace former legacy revenue sources is a sign of agility.  Others might note the Telco revenue sources have transformed because the voice market has deteriorated so much, and because Telcos were lucky to "find" mobile services so popular.

Whichever view one takes, revenue sources are changing.

In the Telco mobile segment, data services have surpassed voice as the largest single revenue segment. For AT&T, data services are the largest contributor in any segment.

At Verizon, wholesale and business services represent about half of total revenues, and mobile contributes more revenue, overall, than fixed network operations.  

Business services, though still a small percentage of Comcast access revenues, are growing fast. In the second quarter of 2014, Comcast recorded 22 percent revenue growth in that product category, representing an annual revenue stream of about $4 billion.

In the second quarter of 2014, though, business segment revenue represented about nine percent of revenue from cable operations. In fact, business revenue now has surpassed consumer voice revenue as a source of Comcast cable operations sales.

Comcast second quarter business revenues were $965 million, while consumer voice generated $922 million.

Compare those sums to video entertainment revenue of about $5.2 billion, and high speed access revenue of $2.8 billion.

High speed access revenue in the consumer segment grew at a 10 percent rate.

Customer relationships decreased by 25,000 to 26.8 million during the second quarter of 2014, a 62 percent improvement compared to a decline of 66,000 during the second quarter of 2013.

Video net losses were 144,000, Comcast says.

At the end of the second quarter, penetration of triple-play customers increased to 36 percent, compared to 34 percent in the second quarter of 2013.

For many of the largest fixed network operations conducted by U.S. access providers, legacy products remain the single-largest source of revenue--voice for some telcos, video for cable TV providers.

But some service providers already find their legacy products are at best the second largest revenue generator. At AT&T, voice could become the third-biggest revenue source. following data services and video entertainment. 



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Contributing Editor

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