The broadband market in the United States is in an exciting period of time. Network evolution is rapidly underway, and players across the industry are heavily investing in fiber deployments and new networking tools based on disaggregation and white boxing. Top trends in the broadband space include network evolution and the deployment of fiber to the home in order to boost uplink and downlink speeds and improve performance, the renewed focus on connecting the unconnected population, new value-added services being offered to subscribers and employers – such as optimized Wi-Fi and gateway-based cybersecurity, as well as the growing competitiveness of the MDU space where bulk internet and managed Wi-Fi deployments are becoming of increasing interest.

Another trend coming to fruition is the increasing exit of US ISPs from the TV and media space. ARPU, measured as mean average reported spending on home services among US broadband households, has been on an overall upward trend. However, as TV subscribers continue to fall, actual revenues for pay-TV and TV-included bundles are declining. As the value of pay-TV among the average consumer drops, so does the willingness to pay for quad- and quintuple-play bundles. Correspondingly ARPU for these bundles has been in decline since 2015-2016. ISPs are reacting accordingly, and many are increasingly divesting themselves of their in-house pay-TV services and offering their customers bundles with the vMVPD services of third-party players.

These latest big business moves we have seen (AT&T, Verizon, WarnerMedia) signify a growing recognition that the business of connectivity and related functionality are of top priority to ISPs, and companies are renewing their focus on this space.

The reasons for this are clear. The home broadband market is growing at the fastest rate in well over a decade, with the number of households adding fixed broadband service up. Growth was strong in2021 as well, with ISPs adding a record number of new subscriptions in the first quarter alone. With recent trends and renewed growth in the home broadband space, Parks Associates forecasts that by the end of 2025 approximately 93% of US households will have a broadband subscription – either fixed or mobile.

This is an excerpt from Parks Associates library of research. We have studied the broadband markets for almost 40 years, tracking adoption, use and perception of broadband services. Thank you for reading our research. We welcome your comments. Visit www.parksassociates.com for more information on our research and events.

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