Cable companies have a bandwidth problem. Both growth and usage gains are slowing.
“What are the growth engines of the past ten years? Broadband, wireless and smartphones,” notes Craig Moffett of independent research company, MoffettNathanson.
“All of those are reaching saturation, and there’s nothing in the pipeline,” he warned.
Broadband penetration is currently at 73 percent, Moffett notes in the report.
But while broadband penetration is growing at an annual rate of 2.5 percent, by the time it reaches 80 percent of US households — likely in three years — the only growth will come from low-income homes without computers, Moffett said.
“That’s tough,” he told The Post.
Moffett is neutral on the sector after almost a decade of holding a positive rating on the cable industry.
Todd Mitchell, a telecom sector analyst at Brean Capital told The Post: “The reality is cable operators sell a bundle of services and they can’t get any more money out of these households.”
Yesterday, the much-anticipated Sandvine report on first-half Internet usage revealed that median aggregate bandwidth usage growth slowed dramatically, rising just 5 percent in the period, versus 77 percent in the first half of 2013, and 190 percent in the first half of 2012.
Separately, the Sandvine report noted that Netflix accounted for 31.6 percent of traffic in North America, while YouTube accounted for 18.6 percent.
Time Warner Cable was off 1.6 percent Monday closing at $119.62. Comcast lost 1.72 percent to $47.35 while Charter was off 0.8 percent to $127.04.
Cablevision went in the opposite direction, rising almost 2 percent to $15.35 on continued sale rumors.