A rare glimpse at broadband competition in Twin Cities metro area shows that wireless service is surging along with the popularity of smartphones, tablet computers and cellular connections for laptops.
The wireless share of the Twin Cities Internet market rose nearly 7.5 percent in the 12 months ended in March, while traditional broadband providers -- Comcast cable and CenturyLink (formerly Qwest telephone) -- saw their market shares decline slightly, according to a study by ID Insight of St. Paul.
The trend suggests a big shift in an Internet market long dominated by companies with wires in the ground. In the coming months, cable and telephone broadband will face even more competition from wireless as its speeds increase tenfold with new 4G networks. Consumers who have wired Internet broadband at home and wireless access via a smartphone could soon be choosing between one or the other.
"The reason that cable and telephone company broadband are not growing is that we have reached the limits of the people who are either able to afford it or are interested in having it," said Roger Entner, an analyst with Recon Analytics in Boston. "There are a lot of people who don't want broadband on a computer, but want it on a cellphone."
For competitive reasons, the telecommunications companies rarely, if ever, disclose local market share information. The ID Insight study affirmed that Comcast had the most broadband customers in the Twin Cities (37.6 percent, or about 345,000 households) for the 12 months ending in March, followed by CenturyLink (27.8 percent, or about 255,000 residential customers).
Wireless broadband -- which includes the cellular providers and the Minneapolis Wi-Fi network -- ranked third (16.6 percent, or about 152,000 households). The number for wireless customers does not include Wi-Fi networks inside homes.
Among Twin Cities wireless customers, about 131,000 appear to be smartphone, laptop or tablet computers users with data plans. The other 21,000 wireless customers belong to the Minneapolis Wi-Fi network, said Joe Caldwell, the CEO of USI Wireless of Minnetonka, which runs the network.
One factor driving wireless broadband growth is that consumers are "cutting the cord" of their traditional broadband providers to go wireless, just as wired phone customers did over the past five years, said Dan Hays, a telecommunications consultant at the PRTM Management Consulting unit of PricewaterhouseCoopers, based in Waltham, Mass.