The High Cost of Internet is Driving The Growth of Cord Cutting 2.0

As the price of traditional cable internet remains high, many consumers are turning to newer, more affordable alternatives in what is being referred to as “Cord Cutting 2.0”. This movement extends beyond ditching cable TV and is now reshaping how households connect to the internet.

What is Cord Cutting 2.0?

Originally, cord cutting referred to consumers canceling their cable TV subscriptions in favor of streaming services. However, Cord Cutting 2.0 focuses on abandoning expensive home internet services from traditional providers like Comcast and Spectrum, and moving towards more economical and flexible alternatives like 5G home internet services provided by Verizon and T-Mobile​.

Factors Fueling Cord Cutting 2.0

1. Increased Options for Internet Service: The emergence of 5G and other wireless internet technologies has broadened the range of options available to consumers. Companies like Verizon have reported significant increases in their 5G home internet customer base, with numbers reaching into the hundreds of thousands within single quarters​.
2. Cost Comparisons and Savings: The cost of traditional internet services can be prohibitive, often including hidden fees for equipment rental that can add up over time​​. Conversely, newer internet services offer more transparent pricing and often do not require long-term contracts or equipment rental fees, making them a more attractive option financially​​.
3. Competitive Responses from Traditional Providers: In response to the growing popularity of alternative internet services, traditional providers like Comcast have introduced more competitive pricing models. For instance, Comcast launched a $30 home internet plan to retain customers and counteract the effects of cord cutting​.
4. Consumer Sentiment and Behavior: There is a growing preference among consumers for flexibility and cost-effectiveness in their internet services. This shift is evidenced by the increasing number of people opting for services that offer these benefits, and the decline in subscriber numbers for traditional internet providers.

Long-term Implications

The shift towards alternative internet services is likely to continue as technology evolves and more players enter the market. This could lead to further reductions in prices and improvements in service offerings as companies compete for consumers’ business.

Cord Cutting 2.0 represents a significant shift in consumer behavior, driven by the high cost of traditional internet services and the availability of more affordable alternatives. As this trend continues, it could reshape the broadband industry, leading to greater innovation and consumer choice.