Broadband is last to go

Why is telecom weathering the recession better than many industries?  The answer is simply that telecom services, including cable, phone, and internet services, are some of the last things people cut when their finances are tight.

Telegraphy’s research, shown below, indicates that the telecom hardware vendors experienced a 6% hit to their revenue in aggregate while the service providers experienced 3% growth over this same period.

Even when people are unemployed, they need their phone and broadband internet services to search for a job.  Of course, they could search the internet and post resumes at their library, but this for many is a last resort, and many libraries limit usage of internet access.

Some are inclined to eliminate their land line phone service to save money.  With the way triple play packages are priced by telcos and cable companies (mine included), there is little financial incentive to cancel phone service and keep only cable and internet service.  These companies have done a great job of maximizing their ARPU with bundling.   And, what is amazing is that a recession, while generally not good, is not all bad for broadband and triple play service providers.

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