2015 Broadband Growth

S vurveOne of the things I’ve figured out about the telecom industry is that statistics are often used to tell very different stories. Consider this example regarding wireline broadband adoption:

In December Pew Research released the results of a survey that suggested that overall wireline broadband adoption had dropped to 67% in 2015, down from a high of 70% in 2013. This was the first time I had ever heard any suggestion that the total number of landline broadband connections have flattened out, let alone dropped.

Pew went on to say that main culprit for the drop in broadband adoption is broadband prices and that a lot of homes feel they cannot afford a broadband connection, and instead rely solely upon broadband from their smartphone. That sounds plausible, and Pew was comparing to a very similar survey they had given in 2013.

But the Leichtman Research Group just released a report saying that the big cable companies added 3.3 million broadband customers in 2015. They said that during the year that the large telcos lost 187,000 landline broadband connections, meaning an overall net increase of over 3.1 million new broadband connections for the year.

The Census estimates there were 124.6 million housing units in the country in 2015, so the big companies in total brought broadband to an additional 2.5% of the total market. That sure does not sound like a year in which broadband has declined as suggested by Pew. And Leichtman has shown total market growth for the last several years as well.

In this case you have to believe the Leichtman numbers. They gather total subscriber numbers from all of the large carriers – cable companies and telcos. Since almost all of these companies are publicly traded, and since Wall Street keeps a close eye on subscribers, one has to think that the Leichtman numbers are pretty accurate.

On the other hand the Pew numbers come from nationwide surveys. Pew did three surveys in 2015 with a total of 6,687 adult respondents. The 2013 numbers they are comparing to was based on surveys of 6,010 adults.

I have always been suspicious of nationwide surveys. Our firm gives surveys and I have found that local surveys can be very accurate and the results can often be correlated with externally collected facts. For instance, I’ve had clients do surveys to find out how many customers their competition has in a market, and these surveys often prove themselves to be valid by also accurately showing the market penetration of my clients. That makes it easy to believe that the numbers for the other competitors in the market are also accurate.

I know that Pew is very careful about how they randomly choose survey subjects. For instance they will call people with cellphones as well as those with landline telephones. If you crunch through the statistical formulas that describe the predicted accuracy of a nationwide survey, then the Pew surveys should be very accurate.

The Liechtman numbers are not a 100% count of broadband customers and only count the customers of the biggest broadband providers – but those providers are something like 95% of the whole market. I know enough about a lot of companies in the rest of the market, the smaller carriers, to know that many of them are still seeing healthy broadband customer growth.

I have no way to explain this difference and I suspect that Pew can’t either. Their survey should be pretty accurate. Yet sometimes nationwide surveys just don’t give accurate results. This can often be seen with elections where different surveys given at almost the same time show fairly disparate predictions. The trouble is that surveys from groups like Pew influence decision makers and there are now going to be those who think that broadband growth has topped out. I was just on a call last week where somebody mentioned the Pew numbers. And while the Pew numbers of total broadband users might not be totally accurate, one can still believe that  their observation that some people are finding broadband increasingly expensive probably is valid. The problem is, you just can’t really know how many people that might be.

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