If you had to bet on one ISP in a horse race, which would it be?
Posted April 20th, 2012 by Tanner
Looking into the future, even the near future, is always a tricky, if not impossible, task. When trying to predict which of the existing Internet Service Providers (ISPs) will pull ahead of the competition, I’d look at current trends in areas such as market penetration, investment in new technology, and of course customer satisfaction.
ISPs are something of a split personality right now. There are the “classic” ISPs, the hard-wired (or occasionally wireless) connections that go straight to individual homes and businesses. But there are also the mobile providers that are serving a rapidly expanding market of users of smartphones, tablets, and other internet-equipped devices.
The major ISPs of the future will be the ones that continue to provide both services, or make a seamless transition between the landline and mobile experience.
The current leaders in broadband Internet service are conspicuously split between those that do both, and those that specialize mainly in hardwired service:
- Comcast (17.4M) – land-based
- AT&T (16.5M) – major mobile and land-based provider
- Time Warner (10M) – almost completely land-based
- Verizon (8.5M) – mobile leader and very strong land-based competitor
- Cox Communications (4.1M) – almost exclusively land-based
Interestingly, both Comcast and Time Warner recently gave up 4G reseller rights to Verizon — perhaps not a crucial indicator, given the multiplicity of business agreements in the mobile and ISP worlds, but yet another indication of Verizon’s increasing strength. All things considered, AT&T and Verizon seem to be running this race neck and neck.
When it comes to customer service, J. D. Power’s 2011 U.S. Wireless Customer Care Performance Studies shows Verizon in the lead, with a satisfaction rating of about 77%, but it must be pointed out that all the mobile providers placed within a narrow range (the lowest, AT&T, scored just over 76%). For residential users, Comcast, Cox, AT&T, CenturyLink, and Earthlink tend to do at least as well as Verizon, and often a little better.
This mixed data reduces Verizon’s luster a little, although the overall trend is away from landline and toward mobile, where Verizon picks up points. So in the second lap, the horses stay in virtually their same places.
For new technologies, I’ll focus on two specific fields of current ISP interest: fiber-optics and LTE (long-term evolution). In both cases, Verizon is a clear leader. The company’s FiOS is by far the most well-known, extensive, and popular fiber-optic Internet service, as opposed to the runner-up U-verse by AT&T. And Verizon’s 4G LTE network has popularity and coverage that other mobile providers are struggling to match.
Working against Verizon is the fact that the company admitted it will be slowing down its expansion of FiOS availability compared to the past year, which may give U-verse (or others) a chance to catch up or surpass Verizon. And there’s no doubt that both AT&T and Sprint are not slacking on their own deployment and expansion of 4G service, so this particular lap may still be won by a nose.
