AUSTIN – Consumers in Texas stand to save as much as $7 billion over five years, thanks to competition from cable operators who now deliver phone service, according to a recent economic study. Residential cable telephony customers in Texas will save over $1 billion per year, an average of $135 or more per customer each year, the study finds.
Nationally, cable phone service is now available to more than 75 million homes and more than seven million customers currently subscribe to the service. By the year 2011, cable telephone customers are projected to grow to 24 million which is expected to result in over $100 billion of savings for both residential and small business users, concludes the economic research firm Microeconomic Consulting and Research Associates, based in Washington, D.C.
These projected savings are based on two primary factors:
the amount that existing cable customers currently save by using lower-priced cable telephone service vs. the increased cost they would pay for service from the incumbent telephone providers (direct savings); and
the competitive response by the incumbent telephone providers to reduce their prices to compete with cable’s new telephone service (indirect savings).
The study was commissioned by the National Cable & Telecommunications Association.
“In just a few years, cable companies have made their presence known in a market dominated for more than a century by traditional phone companies,” said Ron McMillan, chairman of the Texas Cable and Telecommunications Association Board of Directors. “Cable companies are gaining telephone customers because they are setting the standard for innovation while delivering more advanced and affordable services.”
In Texas, more consumers are choosing a cable company as their voice provider. Last month, for example, Time Warner Cable San Antonio hit a significant milestone by signing up its 110,000 th digital phone customer, accomplishing this goal in under two years. San Antonio continues to be one of the fastest growing digital phone markets in the company, as one in six San Antonians subscribe to Time Warner’s phone service.
A new study by Convergence Consulting Group also predicts that U.S. cable operators will garner 24 percent of residential telephone customers by the end of 2009.