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- US Home ISPs and Bundled Services Market Report 2023
“Speed and reliability are the key factors consumers look for in home internet service. Price is important and more engaged consumers will work the system to create value themselves. Meanwhile, as traditional mobile wireless makes a stronger push into the market, and as home internet providers increasingly offer mobile phone service, the distinction between home and mobile internet will diminish, leading consumers to seek a holistic communication provider.”
– Jenni Nelson, Tech, Media and Entertainment Analyst
This Report looks at the following areas
- Current and forecast sales of home communications services
- What’s driving the market
- Key players and competitive strategies
- Home internet service type, connected devices and data demands, and bundled services trends
- Home internet satisfaction, attitudes toward home internet, loyalty and switching triggers
Collapse All
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Overview
- What you need to know
- This Report looks at the following areas
- Definition
- Market context
- What you need to know
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Executive Summary
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- Top Takeaways
- Consumer trends
- Cable still leads, but fixed wireless makes rapid gains
- Figure 1: Home internet service, 2019-23
- Tipping point reached between traditional and on-demand/mobile bundling, home security/automation will be area for growth
- Figure 2: Services bundled with home internet, trended, 2019-23
- Customer satisfaction grows, but so do expectations and demand
- Figure 3: Overall home internet satisfaction, 2021 vs 2023
- Subscription longevity not tied to consumer satisfaction
- Speed and reliability drive satisfaction, slow internet is a top reason for switching
- Consumers may be underestimating how much bandwidth they need
- Women are less engaged with internet mechanics; they want to know so what? too
- Competitive strategies
- Spectrum expands in rural areas, aims to transcend the mobile bundle
- Xfinity’s promotion of 10G network causes some confusion
- AT&T doubles down on fiber, uses “aspirational” messaging for its multi-gig service
- Verizon delves deep into promotions and incentives
- T-Mobile disrupts with 5G fixed wireless, but fiber is on its horizon
- Market predictions
- Figure 4: US expenditures and fan chart forecast of home communications services, at current prices, 2017-27
- Opportunities
- Promote home and mobile bundles as a single product
- Capitalize on increased consumer satisfaction to showcase the brand
- Educate consumers to increase satisfaction
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Market Size and Forecast
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- Highly competitive market keeps prices in check; slow, steady growth to continue
- Figure 5: US expenditures and fan chart forecast of home communications services, at current prices, 2017-27
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- Figure 6: US expenditures and forecast of home communications services, at current prices, 2017-27
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Segment Performance
- Streaming, mobile bundles growing
- Figure 7: Services bundled with home internet – Trended, 2019-23
- Choice fatigue may help pay TV bundles make a comeback
- Ad-supported streaming services proliferate
- Mobile phone service and data bundles born anew
- Landline bundles: worth maintaining, but not investing
- Home security/automation bundles are an area of opportunity
- Streaming, mobile bundles growing
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Market Drivers
- Perpetually increasing data usage
- Figure 8: Average monthly household broadband usage, 2012-22
- Value of home internet makes it inflation-proof
- Figure 9: Consumer Price Index and CPI internet services change from previous period, 2022-23
- Government funding helps make internet available and affordable for all
- Affordable Connectivity Plan
- Broadband Equity, Access, and Deployment Program
- Rural Digital Opportunity Fund
- Shortage of fiber cable could slow rollout
- Amazon’s Project Kuiper testing satellites for home internet service
- Perpetually increasing data usage
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Key Players and Competitive Strategies
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- Figure 10: Top five telecom industry spenders – Share of digital/social spend, Jan 2022-Mar 2023
- Xfinity sets sights on multi-gig speeds, Xumo content
- 10G network launched in 2023
- Figure 11: Xfinity direct mail marketing, 2023
- Xumo ecosystem set to add hardware
- Figure 12: XumoTV email marketing, 2023
- Spectrum goes mobile-first, offers content platform
- Rising prices attributed to inflation
- Spectrum One marketed not as a service but as an “experience”
- Figure 13: Spectrum One Facebook post, 2023
- Rural expansion to reach 500,000 new customers
- AT&T concentrates on infrastructure and fiber
- Strengthening network resiliency
- Fixed wireless not an area of concentration
- Figure 14: AT&T Fiber “AT&T Super Clotheslined” video ad, 2023
- Verizon delves deep into promotions and content platform
- Figure 15: Verizon email marketing, 2023
- Straight Talk Wireless Home Internet
- Verizon +play
- T-Mobile is the 5G leader, but has ambitions in fiber
- Figure 16: T-Mobile direct mail marketing, 2023
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Market Opportunities
- Partner home internet with mobile to offer holistic connectivity
- Leverage increased consumer satisfaction to showcase the brand
- Educate consumers to increase satisfaction
- Be a guide on bandwidth needs
- Show unsatisfied cable subscribers they have options
- Engage women with real world examples to illustrate what benefits provide
- Partner home internet with mobile to offer holistic connectivity
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The Home Internet Consumer – Fast Facts
- Three segments present distinct opportunities for conversion and retention
- Fixed wireless is quickly gaining share at the expense of cable
- Pay TV/landline bundles give way to streaming/mobile bundles
- Satisfaction grows as providers make back-end investments but keep cost increases to a minimum
- Relocation is a key driver to changing providers
- Home internet service is not top-of-mind for most consumers
- Fiber users feel they are getting a good value, cable users less so
- Consumers who “work the system” have a higher regard for their provider
- Three segments present distinct opportunities for conversion and retention
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Consumer Segments for Home Internet Service
- Home ISP and bundled services attitudinal segments
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- Figure 17: Home ISP and bundled services consumer segments, 2023
- Engaged and Empowered (29%)
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- Figure 18: Engaged and Empowered – Key characteristics, indexed to all, 2023
- Disadvantaged and Disappointed (37%)
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- Figure 19: Disadvantaged and Disappointed – Key characteristics, indexed to all, 2023
- Settled with Speed (34%)
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- Figure 20: Settled with Speed – Key characteristics, indexed to all, 2023
- Home ISP and bundled services attitudinal segments
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Home Internet Service and Provider
- Internet service types and characteristics
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- Figure 21: Types of internet service, download speeds and availability, 2022
- Cable leads, but the future may be fixed
- Figure 22: Home internet subscription, by type of service, 2019-23
- “Just as good” at a lower price appeals to many
- Figure 23: Top of home internet service, by key demographics indexed to all, 2023
- Engaged and Empowered are not defined by their internet service
- Figure 24: Home internet service, by cluster groups, 2023
- Fixed wireless threatens regional providers
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- Figure 25: Home internet provider, 2023
- Clear winners in cable and fiber
- Figure 26: Home internet provider, by type of service, 2023
- Internet service types and characteristics
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Bundled Services
- Focus on streaming and mobile bundles
- Figure 27: Services bundled with home internet, trended, 2019-23
- Offer a range of services for consumers to customize
- Figure 28: Services bundled with home internet, by type of service, 2023
- Services must evolve to maintain and grow share
- Figure 29: Services bundled with home internet, by home internet provider, 2023
- Tap into what consumers value to create relevant propositions for subscribing
- Figure 30: T-Mobile direct mail marketing, 2022
- Appeal to Disadvantaged and Disengaged with loyalty campaigns
- Figure 31: AT&T direct mail marketing, 2022-23
- Figure 32: Services bundled with home internet, by cluster groups, 2023
- Focus on streaming and mobile bundles
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Home Internet Satisfaction
- Investment in back-end development improves overall satisfaction
- Figure 33: Overall home internet satisfaction, 2021 vs 2023
- Leverage increased satisfaction with campaigns focused on strengths
- Figure 34: Satisfaction with aspects of home internet, 2021 vs 2023
- Overall industry – aspects to promote, prioritize, monitor and maintain
- Figure 35: Level of satisfaction with home internet provider – Key driver output, 2023
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- Figure 36: Key drivers of satisfaction with home internet – Overall, 2023
- Customer service and installation/setup are areas of opportunity
- Figure 37: Verizon Home Internet commercial, 2023
- Mobile phone brands have an edge over cable providers
- Figure 38: Overall home internet satisfaction, by type of service and provider, 2023
- Cable modem – aspects to promote, prioritize, monitor and maintain
- Figure 39: Key drivers of satisfaction with home internet – Cable modem, 2023
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- Figure 40: Spectrum and Xfinitiy direct mail marketing offers, 2022
- Fiber optic – aspects to promote, prioritize, monitor and maintain
- Figure 41: Key drivers of satisfaction with home internet – Fiber optic, 2023
- Fixed wireless – aspects to promote, prioritize, monitor and maintain
- Figure 42: Key drivers of satisfaction with home internet – Fixed wireless, 2023
- DSL – aspects to promote, prioritize, monitor and maintain
- Figure 43: Key drivers of satisfaction with home internet – DSL, 2023
- Investment in back-end development improves overall satisfaction
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Loyalty to Home Internet Provider
- Move quickly to offer a home and mobile internet package
- Figure 44: Spectrum One direct mail marketing, 2023
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- Figure 45: Length of subscription with home internet provider and mobile network provider, 2023
- Inform unsatisfied cable users that they have options
- Figure 46: Length of subscription, by type of service and by provider, 2023
- Appeal to younger generations with flexibility and control
- Figure 47: Length of subscription, by generation, 2023
- Focus retention messaging on those who switch providers most often
- Figure 48: Length of subscription, by cluster groups, 2023
- Move quickly to offer a home and mobile internet package
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Motivations for Switching Service
- Use retention strategies to combat relocation-prompted cancellations
- Figure 49: Motivations for switching service, 2023
- Devise strategies to retain customers based on why they want to switch
- Figure 50: Motivations for switching service, by current type of service, 2023
- Xfinity and Spectrum are not communicating their value
- Figure 51: Motivations for switching service, by current provider, 2023
- Rely on lifestage to determine what consumers need, and why they switch
- Figure 52: Motivations for switching service, by gender and age, 2023
- Use retention strategies to combat relocation-prompted cancellations
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Connected Devices and Home Data Demands
- Consumers need guidance on how much bandwidth they need
- Figure 53: Types of connected devices in the household, 2023
- Target Settled with Speed with bundles that support smart home tech
- Figure 54: Types of connected devices in the home, by cluster groups, 2023
- Operate five years ahead to meet future data demands
- Figure 55: Home internet activities, 2023
- Translate speed into what it can simultaneously power
- Figure 56: Home internet activities – Turf analysis, 2023
- Negative campaigns targeting FWA are not keeping consumers away
- Figure 57: Home internet activities, by type of service, 2023
- Promote owned streaming platforms as no- or low-cost alternatives
- Figure 58: Home internet activities, by impact of inflation, 2023
- Consumers need guidance on how much bandwidth they need
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Attitudes toward Home Internet – Engagement
- Engage women with what benefits provide, not just the benefits themselves
- Figure 59: Engagement with service, by gender, 2023
- Cable companies must show their diversification into fiber and FWA
- Figure 60: Engagement with service, by provider, 2023
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- Figure 61: Engagement with service, by type of service, 2023
- Gamify usage to build engagement
- Figure 62: Engagement with service, by cluster groups, 2023
- Engage women with what benefits provide, not just the benefits themselves
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Attitudes toward Home Internet – Value
- Use consumer data to personalize extras, loyalty rewards messaging
- Figure 63: Attitudes toward value, by household income, 2023
- Revisit how to engage with long-term but dissatisfied subscribers
- Figure 64: Attitudes toward value, by provider, 2023
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- Figure 65: Attitudes toward value, by type of service, 2023
- Be flexible as consumers create their own value
- Figure 66: Attitudes toward value, by cluster groups, 2023
- Use consumer data to personalize extras, loyalty rewards messaging
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Attitudes toward Home Internet – Competition
- Plan hyper-local retention strategies for rural customers
- Figure 67: Attitudes to competing services, by age and population density of residence, 2023
- Show cable modem users how services compare to the competition
- Figure 68: Attitudes to competing services, by provider, 2023
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- Figure 69: Attitudes to competing services, by current type of service, 2023
- Plan hyper-local retention strategies for rural customers
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Appendix – Data Sources and Abbreviations
- Data sources
- Sales data
- Forecast
- Consumer survey data
- Marketing creative
- Abbreviations and terms
- Abbreviations
- Terms
- Data sources
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Appendix – The Market
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- Figure 70: US expenditures and forecast of home communications services, at inflation-adjusted prices, 2017-27
- Figure 71: Top five telecom industry spenders – Share of digital/social impressions, Jan 2022-Mar 2023
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Appendix – The Consumer
- Key Driver Analysis
- Interpretation of results
- Figure 72: Satisfaction with aspects of home internet service – Key driver output, 2023
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- Figure 73: Satisfaction with cable modem internet – Key driver output, 2023
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- Figure 74: Satisfaction with fiber optic internet – Key driver output, 2023
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- Figure 75: Satisfaction with fixed wireless internet – Key driver output, 2023
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- Figure 76: Satisfaction with DSL internet – Key driver output, 2023
- Internet satisfaction by type of service
- Figure 77: Satisfaction with aspects of home internet, by type of service, 2023
- Connected devices index by type of service and provider
- Figure 78: Connected devices – Indexed to all, by type of service and provider, 2023
- TURF Methodology
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- Figure 79: TURF Analysis – Home internet activities, 2023
- Attitudes toward home ISPs
- Figure 80: Attitudes toward home ISPs, 2023
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- Figure 81: Attitudes to competing providers, by cluster groups, 2023
- Key Driver Analysis
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