Bernstein Research analyst Craig Moffett has an interesting piece on how the cable industry is outgrowing the wireless sector. According to his statistics cable is growth is outpacing wireless in his ‘ revenue per subscriber’ calculations. By doing this Mr. Moffett comes to his conclusion that cable is the current winner.

In a recent article it also states that:

Moffett says there are a number of reasons for this, not the least of which is that the wireless market is much, much more competitive. In wireless, there are five facilities-based carriers in most markets – AT&T, Verizon Wireless, Sprint, T-Mobile and either Leap Wireless or Metro PCS. In some markets, there are also regional players, like U.S. Cellular. There are new entrants coming, with Cox building out a system what will compete in 10% of the country. There are resellers like Virgin Mobile and Tracfone. And there’s Clearwire, which is trying to build out a national WiMax service.

Contrast that with the pay TV market, where in 75% of the country there are just three players – the cable company, DirecTV and Dish Network, and in 25% there are four, adding in Verizon’s FiOS service or AT&T U-Verse.

But where things really get good for the cable sector, he notes, is in broadband. In most markets, there are just two players – DSL from the phone company and cable. Thanks to high demand and the small number of competitors, pricing for broadband connectivity has actually increased over the last five years, defying expectations. Broadband, Moffett contends, “is quite simply a better business than either video or wireless.” He notes that the telcos are building out fiber to 40% of U.S. homes, but that for the other 60%, “cable modem service is looking more and more like it will be the only game in town.”

“Like it or not, cable wins this game,” Moffett writes. “They got there first with a truly high capacity pipe into the home, and in the majority of America they will remain almost unchallenged.” The analyst notes that structural advantage of this variety is rare, and translates into “above-market growth, latent pricing power and sustained economic returns in excess of the cost of capital.”

I’m not sure how accurate these figures are or if cable is really winning the broadband game. What do you think?

Comments welcome.

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