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Comcast lost 65,000 broadband subscribers in the first quarter
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The company added 289,000 wireless lines in the quarter
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Overall, Comcast reported $30.1 billion in revenue, an increase of 1.2% year over year
Comcast is a diverse company with broadband, wireless, linear video, streaming, theme parks, NBC Universal – you name it. But on today’s first quarter 2024 earnings call, the vast majority of analyst questions were about Comcast’s broadband unit, which is struggling more than other parts of its business. Comcast serves about 32 million broadband customers.
Comcast President Mike Cavanaugh said today, “The broadband market remains extremely competitive particularly in the market for more price-conscious consumers.”
The company lost 65,000 broadband subscribers in the first quarter, following the loss of 34,000 subscribers in the fourth quarter of 2023.
“As we sit here right now, we do not see this trend improving in the near term,” said Comcast CFO Jason Armstrong. “The second quarter also tends to experience seasonal headwinds. We expect to grow healthy broadband revenue growth through ARPU, which we expect to remain well within our historical range of 3-4% growth.”
The company attempted to divert attention away from broadband subscriber losses by focusing on broadband average revenue per user (ARPU), which grew 4.2% during the first quarter, driving growth in residential broadband revenues to over $6.5 billion.
Cavanaugh said the company is working hard and fast on network upgrades of its HFC plant to “stay well ahead of demand.” Its deployment of mid-splits doubled year over year and now reaches 40% of Comcast’s broadband footprint. “The investments we are making to increase capacity and incorporate multi-gigabit symmetrical speeds everywhere we offer service put us in a great position,” he said. “And when combined with our rapid footprint expansion set us up to gain market share and return to broadband subscriber growth over time."
Wireless
Comcast has been offering a mobile virtual network operator (MVNO) wireless service for a few years now, and that business is doing well.
The company added 289,000 wireless lines in the first quarter, an increase of 21% year over year. It now serves 6.9 million wireless customers. And the company has room to grow with only 11% of its broadband customers taking wireless, so far.
The company also touted its Wi-Fi network of 23 million hotspots. It just recently announced Wi-Fi Boost. Comcast says 90% of all its Xfinity mobile traffic is delivered over Wi-Fi, not cellular.
Cavanaugh was asked whether Comcast still considers wireless as simply a way to better serve its main broadband business, or whether wireless is becoming an important standalone revenue generator.
“We’ve always thought the main value of wireless for us is connected to broadband,” said Cavanaugh. "It surrounds broadband with value. But it’s also a product where the marginal economics are strong. But the way we go to market, it’s connected to broadband, and it’s connected to packaging.”
Fixed Wireless
Dave Watson, CEO of Comcast Cable, said competition has heated up in the small and medium business segment, coming from the fixed wireless access (FWA) services now offered by T-Mobile, Verizon and AT&T.
Today, Watson said, “There’s no question that the SMB market has become a bit more competitive, and fixed wireless is a part of that. We now have three fixed wireless competitors that are in it. When you have that much all at once there’s some impact.”
ACP
Comcast, like many broadband providers, is facing the end of the Affordable Connectivity Program (ACP). The company has 1.4 million ACP customers.
Armstrong said, “We expect churn could be elevated given the end of ACP. We remain in constant communication with our ACP customers and will continue to be diligent helping this customer segment to stay connected through various options. Whether that’s our successful Internet Essentials program or our new prepaid NOW offering.”
NOW is Comcast’s new brand that targets lower-income customers with prepaid broadband, wireless and TV.
Watson said “There’s currently a lot of activity at the low end of the market. And we’ve not been as competitive in this space. In the prepaid area in particular we believe there is an opportunity to improve our effectiveness there.”
The numbers
Overall, Comcast Corporation reported $30.1 billion in revenue during its first quarter 2024, an increase of 1.2% year over year. Its net income increased 7.6% year over year to $4.17 billion.
Domestic broadband revenue grew 3.9% to $6.6 billion.