Cable vs Telecom Operating Costs: Who’s Really Better?

It has been a rule of thumb that US cable TV operators have operating costs lower than their major telecommunications competitors. But on one metric -- revenue per employee -- AT&T and Verizon arguably perform much more efficiently than US cable TV operators.

Between 2007 and 2012, AT&T eliminated 67,620 jobs, almost a quarter of its workforce. At least in part, that accounts for average sales per AT&T employee of $495,000 in 2012, up from $209,000 in 2006. Over the same five-year period, Verizon eliminated 48,000 jobs. Industry wide, employment in the entire telecom industry has fallen by almost 200,000 since 2007, according to the US Labor Department.

Most of those cuts have come in the fixed network business, as mobile segment headcounts have been roughly flat between 2001 and 2008, and have been declining since 2008. Between 2008 and 2010, the mobile segment lost about 40,400 jobs overall, by some estimates. By other estimates, US mobile business jobs dropped by only about 10,000.

The point is that, by any estimate, most of the lost US communications jobs have come from the fixed network business. Still, it remains the case that US cable operators have operating cost structures lower than the leading US telecommunications companies.