- Comcast Cable’s CEO predicted to lose more than 100K broadband subs in Q4, which sent Wall Street in a spiral
- But analysts said investors may have jumped the gun, as Comcast still faces competitive pressure from fiber and fixed wireless
- It won’t be easy for Comcast to get out of its broadband slump, but DOCSIS 4.0 is a silver lining
Comcast has been treading rough waters on the broadband front and it’s not going to get better anytime soon, according to Comcast Cable CEO Dave Watson.
At a UBS investor conference, Watson shared the not-so-sunny prediction that Comcast expects to lose “just over 100,000” broadband subscribers in Q4 as the market remains “competitively intense.”
Watson’s remarks threw Wall Street for a loop, causing company stock to nosedive more than 8% on Monday.
But Comcast’s investors may have jumped the gun, according to MoffettNathanson’s Craig Moffett. Comcast in Q3 said it would have gained subscribers if it weren’t for the end of the Affordable Connectivity Program (ACP).
When shareholders heard that, they “may have gotten a bit ahead of themselves,” Moffett told Fierce.
“This is a reminder that the waters are still really choppy,” he said.
Comcast for a while has been grappling with fiber competition, though it does deploy some fiber itself. It’s also dealing with pressure from the operators offering fixed wireless access (FWA). Both T-Mobile and Verizon recently doubled down on their long-term FWA targets.
“Wall Street was very optimistic that Comcast turned a corner, but I didn’t share this optimism,” said Recon Analytics principal Roger Entner. “Cable providers are still trailing fiber and FWA in satisfaction.”
Comcast’s cable rival Charter, which had over 5 million households enrolled in ACP, also continues to shed broadband subscribers.
Watson said at the conference Comcast will “compete fiercely for every segment,” including the more “price-conscious” side of the market. He referred to the operator’s NOW prepaid products, which include wireless, fixed broadband, Wi-Fi and streaming TV services.
Can Comcast get out of its broadband slump?
Looking ahead to 2025, analysts at TD Cowen don’t expect the competitive climate to improve for cable.
“While the all-time low sentiment may be behind us, we don’t see meaningful catalysts into 2025 as FTTH and FWA pressures will remain relentless,” they said in October.
Moffett on the other hand has a more optimistic outlook for Comcast’s broadband biz.
“The headwinds from fiber overbuilds and FWA aren’t changing much – if anything, they’re slightly lessening – and DSL’s contributions are relatively stable as well,” he said.
Operators this fall also had to pick up the pieces of their wireless and wireline networks following Hurricanes Helene and Milton. For Comcast’s part, Watson said it’s still assessing the impact but estimates the hurricanes will impact 10,000 of the subscriber losses in Q4.
“After all the smoke from ACP and hurricanes and work stoppages has cleared, Comcast is likely to be left with relatively modest but predictable losses,” said Moffett. “And, most importantly, those losses won’t be getting worse, they’ll be getting slightly better.”
But will it be so simple? According to Entner, Comcast won’t get out of its broadband slump until it fully rolls out DOCSIS 4.0, “which should improve their customers network experience.”
The operator also needs to “provide better customer service and get rid of exploding prices,” Entner said.
Comcast was the first out of the gate to commercially deploy DOCSIS 4.0, but the technology is currently live in just a handful of markets. Watson said Comcast is halfway done with its mid-split upgrades, which will enable faster upstream speeds across its footprint and set up the foundation for 10G.
