May 25, 2022
US cable's assault on the mobile market continued in the first quarter of 2022 as Comcast, Charter Communications and, to a lesser degree, Altice USA made a big dent in the wireless industry's overall growth.
On an as-reported basis, US cable snared 43.9% of net mobile adds in Q1 2022, cable's highest share of industry growth since Q1 2019, according to a new report (registration required) from MoffettNathanson.
But that picture grows even more stark when 3G phone disconnects are applied.
"[I]t is through this lens that Cable's remarkable showing in Q1 must be viewed," MoffettNathanson analyst Craig Moffett reasoned. "After deducting lost 3G subscribers from the industry growth total, Cable's Q1 subscriber gain comes to an extraordinary 98% of industry growth."
Figure 1: Click here for a larger version of this image.
(Source: MoffettNathanson. Used with permission.)
The analyst said he believes the scenario that played out in the first quarter of the year "is not simply a fluke of one-time reporting anomalies." He estimated that cable's share of post-paid phone gross adds in the period, at 11.5% and exclusive of the 3G issue, was its highest ever. That result compared to post-paid phone gross adds of 31.5% for T-Mobile, 28.2% for AT&T and 27.7% for Verizon.
Cable's recent success in mobile comes as the broader industry is experiencing decelerating growth. With 3G phone disconnects included, the rate of industry growth decelerated to 2.4% in Q1 2022. US wireless industry net adds reached 1.6 million in Q1 2021, down from adds of 2.13 million in the year-ago quarter.
"Wireless subscriber growth, after years at unsustainably high levels, is at last slowing. And Cable is taking more of what’s left," Moffett explained. "Wait, scratch that. Cable is taking ALL of what's left."
"A slowdown in subscriber growth would be noteworthy under any circumstances. But it's only half the story," Moffett noted. "The rest of the story is Cable's share of that growth."
Just getting started
US cable added a record 703,000 lines in Q1 2021, growing that base to 8.4 million – still less than 3% of the US wireless market.
US cable has "a very long runway ahead," Moffett predicted. "The competitive pressure from Cable – and the share loss to Cable – isn't likely to abate."
The analyst also pointed out that US cable operators have made these gains without resorting to handset subsidies, a change that Moffett said he sees coming sometime before the end of the year.
"Handset subsidies from Cable, if and when they come, will only put more pressure on incumbents," Moffett wrote.
A recent acceleration in mobile line growth from US cable has also emerged ahead of Altice USA's expected aggression in the wake of its new MVNO agreement with T-Mobile. More pressure could result when Cox Communications expectedly reenters the mobile fray.
"Step back from the numbers and, although Cable is now capturing at least half, and potentially almost all, market growth, one is still left with the impression that Cable is just getting started," Moffett wrote.
Home broadband/mobile has become Comcast's 'lead bundle,' CFO says More Verizon changes: price hikes, departure of biz CEO Erwin AT&T's price increase could send customers to Verizon Charter wraps buildout of mobile core as CBRS market trial nears Cable's wireless biz 'ready for its star turn' – analyst — Jeff Baumgartner, Senior Editor, Light Reading
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