CableCo Net Adds Saga – Inside Towers

It’s actually a tale of two markets. Comcast (NASDAQ: CMCSA) and Charter Communications (NASDAQ: CHTR), the two biggest cable companies in the U.S., according to Inside Towers Intelligence, have had their share of ups and downs over the past two years trying to expand their respective broadband and mobile subscriber bases.

For both companies, signing up new customers to cable broadband services has been, well, a disaster. They both have actually been losing customers to fiber overbuild competitors and to mobile network operators’ fixed wireless access services. On the other hand, both cablecos have had success in signing up new customers for their mobile services, by offering wireless in a bundle with Internet and TV services. 

For the full year 2023, Comcast lost 66,000 domestic broadband customers compared to 263,000 net adds in 2022, and 1.4 million added in 2021. Comcast ended the year with 32.3 million domestic broadband customers. Its Xfinity Mobile branded service fared much better. The company added 1.3 million wireless lines in 2023, up 24 percent YoY, to bring its year-end total to 6.6 million.

Similarly, Charter added just 155,000 Internet connections compared to 344,000 in 2022, and 1.2 million in 2021. The company ended 2023 with a total of 30.6 million residential and small business internet customers. By contrast, Charter’s Spectrum Mobile-branded wireless business is thriving with 2.3 million net adds in 2023, to reach 7.8 million subscribers at year-end, up from 5.3 million at year-end 2022.

Both companies indicated there is still considerable upside potential to their mobile business. They cited the fact that mobile service take rates among broadband customers is still relatively low. In Comcast’s case, it was 11 percent at the end of 2023, while Charter’s was 13 percent. That said, the cablecos acknowledge that getting their broadband customers to sign up for mobile services means taking those customers away from MNOs.

Comcast and Charter today both offer wireless services as Verizon MVNOs. But that situation is changing. Each company spent nearly $500 million in FCC Auction 105 to acquire CBRS Priority Access Licenses that overlay their cable properties around the country, Inside Towers reported. Both cablecos are gradually deploying their own CBRS small cells on their cable plant in select areas with the idea of migrating their mobile customers from the Verizon network to their own wireless infrastructure.

While taking losses on broadband net adds, both companies believe the current situation will be short-lived. They expect MNO fixed wireless access will soon run out of steam and not keep up with customer data throughput demands that FWA is placing on the mobile networks. They are also of the opinion that fiber overbuilders will not see as many homes connected compared to homes passed as the overbuilders expect, and are not likely to realize their ROI projections.

Both cablecos are confident that over the long term their cable plant will prove to be a better performing platform, enabling them to compete favorably against telco broadband and wireless alternatives. Both companies are being proactive by: expanding their fiber footprint; upgrading the current DOCSIS 3.1 cable operating system to DOCSIS 4.0 that is designed to deliver symmetrical multi-gigabit speeds; adding more frequency mid-splits in existing plant for greater upstream capacity; and deploying Distributed Access Architecture to transfer more functionality from the headend to intelligent fiber nodes closer to customers.

Comcast has not yet provided guidance for 2024 capital expenditures. Capex in its Connectivity and Platforms segment has averaged $8 billion a year for the past three years, and likely will be in the $8-9 billion range for 2024. 

Charter spent $11.1 billion on its cable network in 2023, and is guiding to $12.3 billion at the midpoint for the next two years before stepping it down to $10 billion in 2026, and $8 billion in 2027. Capex for line extensions accounted for about one-third of the total and half of that was government-subsidized in rural areas. 

Both companies are applying for BEAD funding to help expand their networks in small town and rural markets.

By John Celentano, Inside Towers Business Editor

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