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Why Cord Cutting Is Spreading to Broadband Internet Subscribers

October 5, 2016, 5:14 PM UTC
Klaus Vedfelt — Getty Images

The phenomenon of cord cutting is usually cited to explain the growing number of people dropping expensive cable TV subscriptions. But a new kind of cord cutting is growing rapidly, according to surveys by Pew Research.

The new trend is people dropping expensive home Internet connections and relying on smartphones to satisfy their online needs. Last year, 13% of adults used only smartphones to connect to the Internet, up from 8% in 2013, Pew said. Meanwhile, only 67% of adults had home broadband connections, down from 70% in 2013.

The change was most dramatic among African Americans, subscribers who earned less than $20,000 a year, and people who lived in rural areas, according to Pew.

The increasing capabilities of smartphones seemed to be the most important reason why people gave up home broadband connections, cited by two-thirds of phone-only Internet users. Other top reasons—both cited by 59% of phone-only users—were that the cost of home broadband was too expensive and that other options were available for Internet access outside of the home, such as at work, the library, or Internet cafes. Another 41% said the cost of a home computer was too expensive. Phone-only Internet users were permitted to choose more than one reason, so the totals add up to more 100%.

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The trend could spell trouble for big cable providers like Comcast (CMCSA) and Charter Communications (CHTR) that are relying on growing broadband subscriptions to offset any future losses on the cable TV side. At the same time, the greater reliance on smartphones could bolster the wireless phone industry.

The overall cord cutting phenomenon started back with landline phones and the proliferation of mobile phones more than a decade ago. Now almost half of all households (47%) have dropped their landline phones for only mobile phone connections, according to surveys done by the Centers For Disease Control. That’s up from less than 10% that were mobile-only 10 years earlier.

The number of households without cable TV has also been growing, reaching one in five households at the end of 2015, according to Convergence Consulting’s annual “Coach Potato” report.