Verizon’s wireless business may have struggled in Q3 2022, but the quarter was a big one for its cable MVNO partners Comcast and Charter Communications. The operators both posted record mobile net additions in the quarter, giving Comcast enough of a boost to cross the 5 million subscriber mark and leaving Charter not far behind.
Comcast added a record 333,000 wireless subscribers in Q3 and ended the quarter with a total of 4.95 million. It announced this week it subsequently surpassed 5 million, reaching the milestone just over five years after the launch of its Xfinity Mobile service in April 2017.
Speaking on the operator’s Q3 earnings call, Comcast CEO Brian Roberts said: “We're still in the very early growth phase in penetrating this segment and we're having a lot of success … we're just getting started.”
Comcast Cable chief Dave Watson added Xfinity Mobile is now available to small businesses and while it’s still early, the operator is “having great success out of the gates with that.”
All told, Comcast’s wireless revenue jumped 30.8% year on year to $789 million.
In a note to investors, MoffettNathanson analysts stated "Wireless is unambiguously Comcast’s next big growth engine." They added "Comcast is clearly leaning into wireless, recognizing not only that it will be their most important growth driver, but that it also potentially holds the key to broadband, as well. Cable is far better positioned than its competitors to offer customers a bundled offering of wireless and broadband together; unlike their competitors, they can offer a bundled offering everywhere, and their cost structure in wireless is dramatically advantaged by the availability of their wired infrastructure."
Charter, meanwhile, topped Comcast’s net add figure with its own record mobile growth, raking in 396,000 mobile lines in the quarter. It ended Q3 with nearly 4.7 million lines. Charter’s mobile revenue rose 40.2% in Q3 to $750 million, however, sales were still outpaced by mobile costs of $846 million.
On an earnings call, outgoing Charter CEO Tom Rutledge noted it has “grown our mobile lines by nearly 50%” over the past year. Like Comcast, Rutledge said Charter is still at the beginning of the runway when it comes to capturing the wireless opportunity.
Current COO and CEO-elect Chris Winfrey added “we're growing mobile at record rates, even in a low-volume environment by saving customers thousands of dollars. That growth is also good for broadband. So, we remain well positioned.”
Earlier this month, Charter unveiled a new Spectrum One bundle which offers its broadband and mobile service at a discounted rate of $49.99 per month for one year. Executives said on the call they expect that offer to drive accelerated mobile growth going forward and even potentially contribute incremental broadband growth.
While Charter's mobile business is still operating at a loss, MoffettNathanson noted "they have a clear path to wireless profitability ahead."
"Charter is just beginning its CBRS traffic offload efforts. As more and more traffic is offloaded onto their own wired (backhaul) network, their margins will expand. And so will their ability to adopt an even more aggressive stance in the market," they concluded.