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Broadband

US cable broadband thrown for a loss, for the first time, in Q2

Comcast, Charter Communications and Altice USA, the nation's top cable operators, shed about 60,000 broadband customers in the second quarter of 2022, a first-ever quarterly loss in the category, according to a post from Leichtman Research Group (LRG).

US cable's broadband sub loss in Q2 2022 compared to a gain of 840,000 in the year-ago quarter.

LRG found that the nation's top telcos lost some 85,000 broadband subs in Q2 2022 versus a net gain of 50,000 in the year-ago quarter. Those top telcos also added 490,000 fiber customers against a loss of 575,000 non-fiber customers.

FWA sub growth surge

The clear winner in the quarter was fixed wireless access (FWA). T-Mobile and Verizon combined to add about 815,000 FWA subs in Q2 2022, up from a gain of 120,000 net adds in the year-ago period.

"Over the past year, there were about 3,260,000 net broadband adds, with fixed wireless services accounting for 56% of them," Bruce Leichtman, president and principal analyst for LRG, said in a statement.

The overall picture for US broadband in the quarter showed a distinct slowdown. LRG said the top cable, telcos and FWA providers in the US, representing about 96% of the market, acquired 670,000 net broadband customers in the quarter, compared to a pro forma gain of roughly 1 million subscribers in Q2 2021. Overall broadband additions in Q2 2022 were 67% of those gained in Q2 2021, LRG said.

That group ended the quarter with about 110 million subscribers. Cable continued to lead the market, with 75.6 million subs, followed by wireline telcos (32.2 million) and FWA providers (2.2 million).

Awaiting cable's response

It's not entirely clear how the US cable industry will respond to the troublesome trend in broadband, a service category now viewed as the centerpiece of the business.

Starry, an FWA provider focused on multiple-dwelling units that gained a record 9,703 customers in Q2, has found cable's general competitive response to center on product bundling and speed upgrades, and not to lower pricing.

"There's a flight to better value plans over expensive bundles and the services that put customers first instead of taking them for granted," Starry CEO Chet Kanojia said on the company's recent quarterly earnings call. "I think the share shift away from cable will continue as more competitors emerge with fiber and fixed wireless, especially in suburban and rural areas."

US cable is expected to pick up the pace on network enhancements that will include upgrades to DOCSIS 4.0 on hybrid fiber/coax (HFC) plant alongside a mix of fiber-to-the-premises (FTTP) network builds in greenfields and, in some cases, existing brownfield areas.

In its latest broadband access network forecast, Dell'Oro Group expects revenues for cable distributed access architecture (DAA) equipment to rise to nearly $1.3 billion by 2026, up from about $1 billion in 2021.

Pay-TV losses hit 1.92 million in Q2

Times remain tough in US pay-TV. LRG also found that the top US pay-TV providers lost a whopping 1.92 million subs in Q2 2022, widened from a pro forma net loss of 1.23 million in the year-ago quarter.

Top cable operators shed 950,000 pay-TV subs in the quarter, up from a year-ago loss of 590,000. Other "traditional" pay-TV providers lost 700,000 subs in the quarter.

The top publicly reporting virtual multichannel video programming distributors (vMVPDs), a group that includes Hulu, Sling TV and FuboTV, lost 265,000 subs in Q2, compared to a gain of 55,000 in Q2 2021. vMVPDs absent from that list include YouTube TV, Philo, DirecTV Stream and Vidgo.

The top US pay-TV providers now account for about 72.2 million subscribers, led by the top seven cable companies (39.5 million), other top traditional pay-TV services (25.5 million) and top publicly reporting vMVPDs (7.2 million).

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— Jeff Baumgartner, Senior Editor, Light Reading

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