Comcast felt the effect of the FCC’s ending of the ACP program in the third quarter, losing a sizeable number of broadband subscribers while seeing seasonal benefits.
The provider reported a net loss of 87,000 subscribers in the quarter, which it said included an estimated net impact of 96,000 associated with the end of ACP.
However, the service provider said that without the ACP program ending, it would have added several thousand new subscribers.
“Excluding this ACP-related subscriber loss, we would have reported positive 9,000 broadband net additions in the third quarter,” said Jason Armstrong, CFO of Comcast, during the third quarter earnings call.
He added that Comcast did see an uptick due to the usual trends it sees every third quarter and new marketing efforts.
“Keep in mind that in the third quarter, we typically benefit from seasonal tailwinds due to back-to-school activity, and this year was no different as we performed very well in that category,” he said. “We also benefited to some extent from a competitor's work stoppage and from leveraging the Olympics by investing in incremental nationwide brand marketing behind our Olympic-related offers.”
Fighting fiber, FWA
Besides battling the end of ACP, Comcast continues to see greater competition from two competitive sources—broadband wireless and fiber-based broadband.
Despite its lower speed issues, it’s hard not to notice the ground that fixed wireless access (FWA) providers gained during the third quarter.
For example, Verizon’s consumer unit reported 209,000 fixed wireless net additions and 39,000 Fios Internet net additions in the third quarter of 2024. Consumer Fios revenue was $2.9 billion in the third quarter of 2024.
While Armstrong acknowledged the influence FWA has on the broadband market, he said it pertains to the cost-conscious broadband consumer.
“From our perspective, as we see it, the two key competitors, as you look at it this past year, fixed wireless has taken its toll,” he said. “We think that's a market that will continue to exist and be around, but it's for the value-conscious consumer. It has carved out a niche in the market that -- whether it's 10%, 15%, I'm not sure we've got a crystal ball, but it is a niche.”
Fiber-based broadband competitors are also making ground.
AT&T, for instance, added 226,000 AT&T Fiber net adds in the third quarter despite a hurricane-induced 30-day work stoppage in the Southeast portion of the company’s footprint.
Armstrong said he sees fiber-based broadband as “the real long-term competitor.”
“Fiber is an entity that's been building out against us for almost 20 years. There has been a steady increase in our footprint. Right now, we're about 50% overbuilt,” Armstrong said. “We will tell you that it will go higher. The carriers have announced plans to take that higher.”
However, he added, "the long-term view is we've competed against fiber for almost 2 decades at this point.”
Wireless convergence opportunities ahead
While Comcast saw struggles with its broadband base, the cable MSO is upbeat about its wireless segment and the potential it creates for bundling and emerging converged offers.
In its domestic wireless business segment, Comcast reported revenue growth was mainly driven by service revenue.
It was fueled by solid growth in customer lines, up over $1.2 million or 20% year-over-year, reaching 7.5 million in total, including 319,000 line additions this quarter.
Armstrong noted that many of its wireless customers also use a broadband connection, which enhances ARPU.
“Our wireless customers are also broadband customers,” he said. “When bundled together, it drives overall customer relationship ARPU growth, churn benefits for broadband and higher profitability.”
He added that Comcast sees potential to grow its wireless and converged services base.
“With wireless penetration at 12% of our broadband subscriber base, we have a long growth runway,” Armstrong said. “We're pleased with our strategy, and we'll continue to test new converged offers to capitalize on the significant opportunities we see ahead of us in wireless, including increasing the penetration of our domestic residential broadband customer base and selling additional lines per account.”
A key element of its convergence play will be its wireline internet service.
Comcast can offer packages that include gig-plus wireline internet speeds and wireless, which are ubiquitous in its footprint of 63 million homes and businesses today. With its internet service, the cable MSO is on track to add over 1.2 million new homes this year.
“We currently have an offering for gig-plus speeds and wireless available ubiquitously to our footprint of 63 million homes and businesses today,” Armstrong said. “By ubiquitous, I mean we are not making any network trade-offs, and every customer gets access to the same offerings. We believe we have a leadership position in convergence, and we think we can sustain that trend.”
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Sean Buckley
Sean is responsible for establishing and executing the editorial strategies of Lightwave and Broadband Technology Report across their websites, email newsletters, events, and other information products.