Ten percent of U.S. broadband households are likely to cancel their wired broadband subscriptions in the next 12 months, according to new market research from Parks Associates. The research sees this as a new wave of wireless substitution, which is now impacting the broadband market.
The trend parallels and comes in the wake of even greater declines in household fixed-line telephone services, Parks notes. Eight percent of U.S. broadband users plan on canceling their fixed-line telephone subscriptions in the next 12 months, Parks says.
Cord Cutting for Broadband
In both instances, U.S. households are turning to wireless/mobile cellular and data services as replacements, Parks highlights in its latest “360 View: Mobility & the App Economy” report.
“The diminishing use of fixed-line voice services may foreshadow the decline of fixed-broadband Internet services as the mobile data capabilities of smartphones increase and mobile carriers in the U.S. re-introduce their unlimited data plans,” commented Parks’ Senior Director of Research Harry Wang.”Not surprisingly, younger consumers are more likely to go completely mobile for their Internet needs; 15% of heads-of-household ages 25-34 are likely to cancel their fixed broadband service in the next 12 months.”
Demonstrating the greater carrying capacity and throughput of the latest wireless/mobile broadband technology, network carriers have already launched high-end, bandwidth-heavy services. T-Mobile launched its zero-rated HD video streaming service and AT&T its zero-rated DIRECTV Now service. In addition, Sprint and Verizon may have triggered another wave of cord-cutting with the introduction of their respective Amazon Prime and Go-90 video services, Parks points out.
“Subscribers to value-added mobile data services are substantially more likely to cancel their fixed broadband service,” Wang said. “This suggests that the use of a mobile phone for entertainment purposes contributes to the consumer perception that they can substitute mobile for fixed-data service with little or no pain.”