Doctor
...high-speed Internet (HSI) access, at a rapid rate over the past three years. At the end of the 2Q04, more than 30M subscribers connected to the Internet utilizing broadband connections Cable television and local telephone companies dominate the residential broadband market with nearly 85% market share. Comcast is the nation's largest broadband provider with more than 5M subscribers. Comcast's subscriber growth and market share leadership can be attributed to its first-mover advantage, acquisition of AT&T's cable customer base and aggressive marketing strategies targeting dial-up Internet access customers. The standard Comcast HSI offer includes install, free hardware and deeply discounted monthly recurring charges for a specified time period. From a cost perspective, cable HSI is high-fixed, low-marginal cost business. Only recently has Comcast seen its subscriber growth slow as local telephone companies began to match HSI feature functionality at lower price points. Sluggish HSI subscriber growth presents significant challenges as Comcast attempts to launch voice-over IP (VOIP) completing the "triple-play" of voice, video and data services. In order to maintain subscriber growth and maintain competitive advantage over local telephone companies, Comcast should be more aggressive on HSI price.
Residential Broadband Market Overview
In terms of sheer subscriber numbers, consumer high-speed Internet service should be considered a success. In 2Q04, cable and telephone companies have combined to add more than 3.5M net subscribers; however, for the first time DSL service providers garnered more new HSI subscribers than cable television competitors. Leading DSL providers added 895,336 net new broadband subscribers in the second quarter, almost eight percent more than the major cable companies, which gained 830,791 new subscribers. Overall, cable HSI 2Q04 new...
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