The pace of broadband subscriber growth at Comcast slowed to 300,000 in Q3 2021 even as the rate of lines being added at Xfinity Mobile reached a quarterly record of 285,000.
Comcast's broadband adds of 300,000 subs were in line with analyst expectations of +296,000. But those gains were down from 633,000 adds in a year-ago quarter fueled by the COVID-19 pandemic, and off from the 379,000 adds in the pre-pandemic period of Q3 2019. Comcast ended the quarter with 31.68 million broadband subs, good for 52.2% penetration of homes and businesses passed. Broadband revenues climbed 11.6%, to $5.8 billion.
Dave Watson, CEO of Comcast's cable unit, attributed the broadband slowdown to a decrease in overall new connects across the company's footprint, creating fewer opportunities for "jump balls" against broadband competitors. However, broadband subscriber churn remains at historic lows, he said.
"We haven't changed our view on the long-term trajectory of the connectivity business," Watson said on today's call, noting that Comcast has added 1.1 million broadband subs through the first three quarters of 2021. "I'm just as confident and optimistic in the prospects in this business as I've ever been … The runway [for broadband subscriber growth] is still absolutely there."
Adds of 285,000 lines at Xfinity Mobile improved on adds of 187,000 in the year-ago period and 204,000 adds in Q3 2019. Comcast ended the quarter with 3.66 million mobile lines in service. Comcast's mobile business stayed in the black as revenues surged 50.7%, to $603 million.
Brian Roberts, Comcast's chairman and CEO, noted that Xfinity Mobile has achieved a penetration of about 6% of the company's broadband base of nearly 32 million.
Watson said Comcast will continue to tie mobile to its core broadband product, but expects Xfinity Mobile to pick up the pace.
"We haven't changed the strategic imperative behind mobile. But most certainly things have accelerated," he said. "Our goal … is to go faster, and to leverage mobile completely in everything that we do."
Pay-TV losses accelerate
Comcast's video losses accelerated in the quarter. The company lost 408,000 video subs, widened from a loss of 248,000 in the year-ago period. Comcast ended Q3 with 18.54 million video subs.
Related to video, Comcast is in no rush to sell its stake in Hulu, the SVoD and pay-TV streaming service now controlled by Disney. Comcast/NBCU still holds a 33% interest in Hulu, and recently struck a deal that paves the way for Comcast to unwind its Hulu stake in 2024.
Hulu's value continues to rise and "we're happy to be along for that ride," Comcast CFO Mike Cavanagh said, noting that Comcast expects Hulu's value to keep going up.
Biz services back on track
Business services was a bright spot, as revenues there rose 8.7%, to $2.2 billion. Comcast Business added about 18,000 new customers in Q3, and has added 72,000 business customers over the past year.
"Business services have emerged from the pandemic," Roberts declared.
Roberts said the midsized and enterprise segments remain "underpenetrated" categories for Comcast Business. But they also represent areas the company will pursue more aggressively following the recent acquisition of SD-WAN and cloud platform specialist Masergy.
- Comcast forges 'network to modem' DOCSIS 4.0 connection
- Comcast Business deals for Masergy to help speed its way up-market
- Comcast goes out of footprint with XClass TV
- Comcast could spark FDX Amplifier trials in 2022, deployments in 2023
— Jeff Baumgartner, Senior Editor, Light Reading