In just a few short years, Verizon's rise in cable subscription has been fast and furious. While growth has slowed in the last quarter, Fios is the 6th largest cable operator, set to overtake Cablevision and the number 5 spot in 2010. And with partnerships with Direct TV in markets that don't have Fios, Verizon is still able to offer a triple play option to compete with cable. What makes Verizon most dangerous to cable in this competitive environment is that they can offer a fourth play, wireless communication, and build a compelling, competitive offer.
Sure Verizon has had to deal with the loss of customers from wireline, but that is mainly due to technological changes; consumers are switching off wires for cellular. To me that means that this third leg for cable is not the real hook that consumers need. Rather, cable must find a wireless product and build out a wireless broadband model. Consumers no longer want to be tethered to their home or to their devices. Devices must follow them.
As Fios' growth exceeds Cablevision, what does that mean for them? Does it push Cablevision to finally sell itself to Time Warner in order for it to better compete in the region? Verizon is reaching scale and no longer needs to sit at the kid's table; they are a major player in the cable distribution industry and will continue to demonstrate a strong voice in the months to come.
My hint to Fios. Buy some independent cable networks and create a stronger programming arm.
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