Cable's Q3 shows ongoing shift to connectivity

Nov. 3, 2018
The financial earnings calls of some of the bigger cable companies reflected the continued shift from an emphasis on pay TV to connectivity, but with a twist. "Connectivity is at the epicenter of our relationship with ...

The financial earnings calls of some of the bigger cable companies reflected the continued shift from an emphasis on pay TV to connectivity, but with a twist.

"Connectivity is at the epicenter of our relationship with customers. And while part of our strategy is to effectively target customers whose current needs are met with broadband only, the majority of our customers are still best served with our bundles of multiple high-value complementary products that provide the best experience and deepen our relationship," said Michael Cavanagh, SVP and CFO, Comcast (NASDAQ:CMCSA).

Cavanagh went on to say that the company continues to innovate around its X1 cloud-based video platform because consuming video is "one of the best ways" to utilize broadband.

"With X1, we have the best platform to serve customers looking for the most content choices and a premium experience," Cavanagh said, noting however, that competitive pressure continues to increase, contributing to 95,000 residential video customer losses during the third quarter.

In broadband, however, Comcast netted 363,000 new customers, which the company said is the best third quarter in 10 years. One gigabit Internet is available to "nearly all" the 58 million homes and businesses in Comcast's footprint. And in a little over a year, Xfinity Mobile has crossed 1 million customer lines.

Charter Communications (NASDAQ:CHTR) noted that its total Internet customer base has grown by more than 1.2 million customers over the last year. The company still experienced losses in video, but said they were less than during the third quarter of 2017. By the end of the 2018 third quarter, 67% of acquired residential customers were in the Spectrum pricing and packaging.

Also during the quarter, Charter rolled out its gigabit speed offering to more than 7 million homes passed and in October launched its gigabit service to more than 12 million additional homes passed. Spectrum Internet Gig is offered to more than 95% of its passings. Gigabit service will be offered in 51 million homes passed by the end of the year, and 80% of residential Internet customers will be subscribed to tiers that provide speeds of 100 Mbps or more.

September saw the full market launch of Spectrum mobile, with a price for unlimited of $45 per month and By the Gig at $14 per gigabyte. Charter's total customer base for Spectrum Mobile is 21,000 lines.

In Canada, Rogers Communications (TSX:RCI.A) saw 35,000 Internet net additions, which it says is 6,000 more than last year and the best result since 2016. The company has embarked on a multimillion-dollar partnership with UBC to build a 5G ecosystem and co-develop 5G applications. The prediction is that 5G-ready equipment and infrastructure will be running on the UBC campus during the first half of 2019. Rogers also plans to launch LTE-M in Ontario as part of the 5G roadmap, which will support fleet track, smart meters, home automation and smart city sensors, among other things.

Rogers President and CEO Joe Natale said that the company "continues to make steady progress" on Ignite TV, and an employee trial will begin soon in Atlantic Canada.

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