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SNL Kagan Forecasts Rapid Shift In Composition Of Residential Phone Service

Monterey, CA (Vocus) April 28, 2008 -- According to an updated forecast from SNL Kagan (www.snlkagan.com), the cable industry is positioned to continue market share growth in the residential phone business, but the gains could prove tenuous in this increasingly dynamic segment. The study, titled "Cable Looks for Phone Share Gains Amid Change," explores the competitive telephony landscape, projecting the continued decline of traditional wireline services provided by telcos and the ensuing battle for market share between cable and wireless providers.

The SNL Kagan analysis illustrates the telcos' loosening grip on the market and the opportunity created for alternative services. In the past two years, the telcos' share has dwindled from 90% to 74% of total connections, with the five-year outlook estimating another 23% drop. The main competition in the space has come from the increased availability of IP voice services from cable operators coinciding with the phase-out of older switched-circuit technology. SNL Kagan projects a steady increase in IP voice subscribers, reaching 31.4 million in 2012, putting cable's market share at 26%. The 10-year forecast shows cable penetration of homes passed stabilizing at 27%.

Concurrent with cable's advance, SNL Kagan sees wireless replacement services gaining momentum, perhaps posing an even greater threat to telco's hold on the market. Approximately 12 million households currently opt for a wireless-only phone connection, with that number expected to increase to about 26 million in 2012 (equal to about 22% of market share.) "The maturing of the younger, more tech-savvy demographic combined with emerging technologies (such as femtocell) set to improve wireless coverage and reduce costs, will further promote the position of wireless services," says Ian Olgeirson, Senior Industry Analyst for SNL Kagan.

SNL Kagan also evaluates the role of independent Internet voice providers and projects the number of customers will decrease in the next five years, largely due to the strength of cable providers in the IP voice market.

Studies such as "Cable Looks for Phone Share Gains Amid Change" are available exclusively as part of the SNL Kagan Information Service. For more information on this study and other media and communications data sets within the SNL Kagan Information Service, call 866.296.3743 or email.

About SNL Kagan

SNL Kagan is a comprehensive resource for financial intelligence in the media and communications sector, including the broadcasting, cable, entertainment, motion picture, telecom, wireless, satellite, publishing and new media industries. The SNL Kagan suite of products integrates breaking news, comprehensive data and expert analysis into an electronic database available online and updated around the clock. For more information, visit: www.snlkagan.com.

About Kagan Media Appraisals

Kagan Media Appraisals, the consulting arm of SNL Kagan, offers custom studies, white papers, briefings, business plans, research reports and appraisals from SNL Kagan's team of expert analysts. KMA is recognized industry wide for actionable advisories, expert opinions, best practices, regulatory assessments and market data. Contact: 831.624.1536 for more information.

SNL Contact

Monica Jenkins

Marketing Manager

Tel. 434.951.6951

mjenkins @ snl.com

SNL Financial

One SNL Plaza

Charlottesville, VA 22902

434.977.1600

Other office locations:

Ahmedabad, India; Arlington, VA; Boston, MA; Islamabad, Pakistan; Jersey City, NJ; London, UK; Monterey, CA; New York, NY.

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