Comcast lost 34,000 broadband customers across consumer and business channels in the fourth quarter and bled 64,000 subscribers for the full 2023, results that might have tanked the cable company's stock in previous quarters.
Also read: Comcast Reports Higher Earnings as Peacock Makes Progress, but Broadband, Video Subs Decline
But the company’s shares are up nearly 4% Thursday. Sure, good news from theme parks and streaming platform Peacock have a lot to do with that. But a shift in cable investor thinking continues to occur, according to top telecom-industry analyst Craig Moffett.
“We’ve long argued that cable investors are no longer counting on a ‘re-acceleration’ in broadband net additions. They simply want to see broadband net adds or losses that are predictable enough to allow focus to shift elsewhere. Most importantly, on broadband ARPU,” he wrote Thursday morning.
For the second consecutive quarter, Comcast has reported 3.9% year-over-year expansion in average revenue per broadband customer (ARPU) — a rate that doesn't suggest Xfinity Internet services are overpriced, but which also indicates the company is getting enough for the service.
”Comcast’s second-straight quarter of 3.9% residential broadband ARPU growth YoY is right in line with the 3-4% range we’ve characterized in the past as being ‘not too hot and not too cold,‘ ” the analyst added.
Speaking during Thursday's earnings call, Comcast CEO Mike Cavanagh spoke of his company's broadband business in resolute terms. There's a belief among management that multi-billion investments in DOCSIS 4.0 cable technology, along with aggressive government subsidies fueling increased passings -- the BEAD program is expected to ramp up next year -- will soon rekindle customer expansion.
And confidence remains high that competition from fixed wireless access will abate. This was perhaps illustrated in the past few weeks, with T-Mobile capitulating on the price of its 5G Home Internet service, which is going back up $10 a month to $60 for folks who don't also have a T-Mobile wireless account for their phone.
"Our domestic broadband business remains strong," Cavanagh said. "We kept our very large and healthy base of subscribers flat while growing residential ARPU 3.9%, the high end of our historical range, driving solid EBITDA growth in connectivity and platforms and expanding margins to around 40% on an underlying basis. We achieved all of this despite an intensely competitive environment, and as I look back on 2023, I am confident that our strategy combined with excellent execution sets us up extremely well to navigate the road ahead."
