Comcast's broadband, wireless gains offset mounting pay-TV losses

Comcast's cable business added 380,000 customer relationships in Q1 2021, a record first quarter result for the company, as broadband and wireless gains more than offset growing pay-TV subscriber losses.

Comcast's broadband business stayed strong in Q1 as the cable op pulled in 461,000 total broadband subscribers (business and residential), nearly matching a gain of 477,000 in the year-ago quarter. Comcast, which ended the period with 31 million total broadband subs, added 448,000 residential high-speed Internet customers, down from additions of 466,000 a year earlier.

Broadband churn improved for a 13th-consecutive quarter, with Q1 2021 representing the lowest broadband churn rate in the company's history, Brian Roberts, Comcast's chairman and CEO, said on today's call.

Comcast was pressed a bit on its plans to deliver symmetrical broadband speeds amid the surge in upstream usage during the pandemic and a focus on data symmetry among some of the operator's FTTP competitors. Comcast is "not standing still," Dave Watson, CEO of Comcast Cable, said.

"Over time, I think we can address symmetrical issues," Watson added, citing a recent field test that delivered symmetrical speeds of 1.25 Gbit/s on Comcast's DOCSIS 3.1 network, and a DOCSIS 4.0 lab trial that used Full Duplex (FDX) techniques to deliver symmetrical speeds of more than 4Gbit/s. "I feel good about our position and I really like our long-term roadmap," Watson said with respect to the company's plans to goose the upstream.

While the pandemic has caused upstream usage to drive upwards, overall usage remains largely asymmetrical. A new study from CommScope found that the downstream/upstream ratio has narrowed but, at 12:1, still remains relatively far apart.

Wireless was a particular bright spot in Q1, as Comcast added 278,000 mobile lines, its best quarter on record, ending the quarter with 3.1 million lines. Light Reading will have more coverage on Comcast's wireless results and plans for the service later today.

Meanwhile, pay-TV losses continued to mount, as Comcast shed another 404,000 residential video subs in Q1, widened from a year-ago loss of 388,000. Comcast ended the quarter with 18.59 million residential video subs. Pay-TV losses in Q2 2021 are expected "to remain elevated," Michael Cavanagh, Comcast's CFO, said.

Streaming strength

Comcast's streaming efforts gained ground. Peacock, the NBCUniversal premium streaming service that launched in July 2020, ended Q1 2021 with 42 million signups, up 9 million from last quarter's tally. NBCU does not break out how many of those signups are taking the service's various tiers (two paid, premium tiers; and one free, ad-supported tier), but attributed the gain to exclusive streaming rights to WWE Network and The Office.

Roberts dropped more hints about Peacock's international expansion plans, citing opportunities with Comcast-owned Sky in Europe and with potential partnerships with local programmers.

Peacock recently crossed 1 billion hours watched, nearly doubling expectations and highlighting the ongoing shift to streaming over traditional TV. "Monthly users of the service are consuming nearly 20% more programing hours each month than our traditional audience on NBC," Roberts said.

Financial snapshot

Comcast's total Q1 revenues climbed 2.2%, to $27.2 billion. On the cable end, Comcast saw broadband revenues jump 12%, to $5.6 billion, as video revenues dropped 0.2%, to $5.6 billion. Capex rose 8%, to $1.4 billion, representing 8.7% of cable revenues.

Showing signs of improvement during the pandemic, Comcast business services revenues jumped 6.1%, to $2.16 billion.

Fueled by record line additions in Q1, Comcast wireless revenues soared 49.7%, to $513 million.

NBCUniversal's Q1 2021 revenues dropped 9.7%, to $7.02 billion, as theatrical revenues plummeted 87.7% due to the pandemic. However, licensing revenues increased 14.1% thanks in part to The Office's exclusive distribution on the Peacock streaming service.

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— Jeff Baumgartner, Senior Editor, Light Reading