The fight for the broadband customer intensifies

Competition in the broadband market continues to intensify as new entrants expand their presence and existing operators look for new growth opportunities. Fiber overbuilding activity is also increasing as operators search for new markets to enter. At the same time, the utility of broadband continues to increase as artificial intelligence becomes a bigger part of how we live and work, making a reliable broadband connection increasingly critical to the adoption and growth of AI.

Satellite internet, once considered too expensive and slow to compete with terrestrial networks, is starting to emerge as a legitimate option for some rural communities. SpaceX’s recent filings show just how profitable its Starlink satellite internet service has become. And while LEO (low Earth orbit) satellite service today is largely targeted at customers in remote areas with limited broadband options, over time, as the network scales and becomes more profitable, it is possible that Starlink could begin penetrating more nonrural markets.

And then, of course, there is Amazon Leo, which is expected to begin its full-scale launch next year. If Starlink’s financials are any indication of what Amazon could achieve as it scales its network, the online giant could have considerable flexibility to offer a very competitive service, especially if it bundles broadband with Amazon Prime.

Starlink proves satellite broadband can scale

Starlink’s subscriber and revenue growth has been impressive. Revenue almost tripled from $3.9 billion in 2023 to $11.4 billion in 2025, while operating income increased nearly tenfold from $469 million to $4.4 billion.

But what is even more impressive is that ARPU (average revenue per user) declined from $99 in 2023 to $66 in the second quarter of 2026, while adjusted EBITDA margins increased from 41% to 61%. Declining ARPU alongside expanding EBITDA margins speaks to the attractive operating leverage in the business model.

Subscriber growth is equally impressive, increasing from 2.3 million customers in 2023 to 12 million in the second quarter of 2026. Satellite internet was long viewed as a losing proposition given the long history of bankruptcies in the industry. SpaceX is showing there is a way to grow the business profitably while still offering a competitive service.

Fixed wireless emerges as a formidable competitor

Verizon, T-Mobile and AT&T have all done an impressive job growing their fixed wireless access services, despite critics arguing they would run out of network capacity before reaching critical mass. Well, critical mass has been reached, and subscriber growth is expected to continue for the next several years.

From 2023 to 2025, T-Mobile grew its FWA customer base from 4.78 million to 8.5 million, while Verizon increased from roughly 3 million to 5.73 million. AT&T went from next to nothing in 2023 to roughly 2 million customers today. Looking ahead, T-Mobile expects to reach 15 million FWA customers by 2030, while Verizon is targeting 8 million to 9 million by 2028.

By offering discounts to existing smartphone customers and utilizing excess network capacity, wireless operators can offer a highly competitive broadband bundle. This is creating another meaningful headwind for incumbent fixed-line broadband operators.

Don’t get “out localed”

Despite the increasingly competitive environment, broadband operators can rely on a proven playbook built on brand, customer service and community relationships.

Many small and rural broadband operators have outstanding local brands and are committed to supporting their communities in ways that larger national operators often cannot replicate. Leaning into that community support, providing best-in-class customer service and developing strong customer relationships have proven to be effective strategies in the face of increased competition from deep-pocketed competitors.

The message is relatively simple: You may get outspent, but you shouldn’t get “out localed.”