Cable One targets FWA competition with 100-meg broadband promo

Cable One is evidently taking aim at fixed wireless access (FWA) competition with a new promo that pitches the operator's 100 Mbit/s (downstream) broadband service, paired with unlimited data, for $25 per month for a year. The tier, which is paired with upstream speeds up to 20 Mbit/s, jumps to the regular price of $50 per month when the 12-month promo ends.

Cable One's new offer for the 100 Mbit/s tier bakes in an unlimited data option that regularly sells for an additional $30 per month. Many of Cable One's other tiers don't bundle in the unlimited data option. The operator's 300 Mbit/s by 20 Mbit/s plan, for example, comes with 700 gigabytes of monthly data, and charges $10 for each additional bucket of 100 GB of data (maxing out at an additional $40 per month) when the monthly limit is exceeded.

Cable One's fine print notes that the limited time promotion on its Connect Internet 100 plan "can expire at any time," and is limited to new customers – those who have not had service with Cable One within the past 12 months.

The promotion is also eligible for the Affordable Connectivity Plan (ACP), making the 100-meg plan essentially free for customers who are eligible to participate in ACP, a program that provides a $30 monthly broadband subsidy.

The analysts at KeyBanc Capital Markets, the first to spot the promotion, believe the speeds, price and unlimited data components of Cable One's new limited-time offer is a good match against FWA competition.

"We believe this plan will be a competitive offer to the lower end of the market targeted by FWA and should be viewed positively for the stock as it hopefully can help reaccelerate subscriber growth," the analysts wrote in a research note.

Cable One's FWA-focused promotion coincidentally surfaces after the operator redeemed its equity investment in Wisper, a fixed wireless ISP.

Cable One has been asked for more color on the strategy behind its new 100-meg broadband promo.

Update: Cable One said via email that the new promotion was launched on September 1 and is currently offered across the majority of the operator's markets. Cable One characterized the new 100-Meg promo for new customers as one that provides "a low cost, high value option to price-conscious customers who may be struggling in the current economy," rather than one assembled to specifically address FWA competition.

Cable One noted that the operator, prior to this promotion, had largely moved away from a 100-Meg speed plan in most markets, instead focusing primarily on speed tiers offering 300 Mbit/s, 600 Mbit/s and 1 Gbit/s. Cable One said does continue to offer speeds from 50 Mbit/s to 1-Gig for ACP customers.

Cable One, the KeyBanc analysts added, has been "rethinking some of its broadband pricing and packaging and this seems like one outcome," noting that the cable operator has typically not targeted the lower end of the broadband market. "While we'd expect some concern around ARPU [average revenue per user] pressure from providing a low-end service, we'd argue there would be minimal impact given the offer is only available to new customers."

Comcast is among other US operators that recently have launched broadband promos targeting FWA competition.

Broadband sub loss in Q2

Cable One's promo also emerges after a second quarter of the year in which the service provider lost 6,000 broadband subs, off from a year-ago gain of 3,000. Meanwhile, Cable One's broadband ARPU jumped 5.9% year-over-year, reaching an industry high of $85.20.

Speaking on the company's Q2 2023 earnings call, Cable One CEO Julie Laulis noted that recent third-party research showed that T-Mobile and Verizon's FWA offerings cover about 40% of the cable operator's footprint, but that their share inside Cable One's footprint is "quite low" and "going in reverse." She also suggested that the vast majority of FWA wins in Cable One markets are coming from a waning base of DSL customers.

However, Cable One's new promo suggests the company is taking action against FWA. Meanwhile, some industry observers believe that FWA competition does pose a threat to Cable One, an operator that is generally focused on rural markets.

"[D]espite commentary on the conference call suggesting that the competitive impact of FWA may be waning – is likely to have a longer runway in rural than in urban markets," MoffettNathanson analyst Craig Moffett explained in a research note issued after Cable One's Q2 call last month.

US cable operators are generally wary of the FWA threat, but executives tend to view fixed wireless as an inferior technology. Speaking last week at an investor conference, Charter Communications CEO Chris Winfrey likened FWA to "another form of DSL."