Share prices for WideOpenWest declined more than 23% to $2.65 a share Wednesday, before rebounding somewhat on Thursday, after the Englewood, Colorado-based cable operator said that it lost 13,300 high-speed data (HSD) customers in the fourth quarter, with competition from fixed wireless access beginning to take a toll.
“The majority of the places our customers go is not to fixed wireless,“ WOW! CEO Teresa Elder told equity analysts during Wednesday’s earnings call. “I think we talked about it last quarter and brought it up because it was the first time it was even much of a blip on the radar. It hadn't been much for us previously. The majority of customers who churn in and out of WOW! will go to Comcast or Charter, who are our biggest competitors every day, kind of all day.”
Elder said a price increase on high-speed internet service instituted last year by WOW!, as well as customers rolling off promotional deals, created an “opportunity” for competitors.
In response, she added, WOW! has bumped up speed tiers for no additional costs -- which included taking minimum-speed customers to 300 megabits per second. WOW! also started handing out free modems with no usage caps or contracts.
Fourth-quarter revenue from internet service for WOW! was up 1% to $108.7 million, but the cable operator saw a 6% decline in total sales to $168.8 million. (WOW!'s full Q4/end-of-2023 earnings release can be found here.)
WOW! is hardly alone among U.S. cable operators grappling with competition from a new source — wireless companies T-Mobile and Verizon have attracted nearly 8 million customers in just more than two years with cheap home-internet services that use excess 5G network capacity on their wireless networks.
While FWA services from T-Mobile and Verizon gained 3.666 million customers in 2023, the top cable operators collectively lost more than 80,000 customers, according to Leichtman Research Group.
Speaking at Deutsche Bank’s annual Media & Telecom Conference on Wednesday, Charter Communications chief financial officer Jessica Fischer described the FWA model as unsustainable. Eventually, she explained, wireless operators will run out of excess network capacity, and they'll have to start pricing FWA at a price that actually accounts for the cost of delivery.
"The reality is, this is not a costless product,” Fischer said.
Meanwhile, in other lesser-priority segments of WOW!’s business, linear video customers declined by 5% in 2023 to 504,100, with the cable operator steering all new HSI subscribers to YouTube TV.
“This YouTube TV partnership provides a fantastic opportunity to provide our customers more content at a much better value and to capitalize on the shift to video streaming,” Elder said.
