Comcast expects to shed another 100K broadband subs in Q4Comcast expects to shed another 100K broadband subs in Q4

Comcast expects to lose another 100,000 broadband customers in the fourth quarter of 2024, reflecting the kind of losses the operator saw in the first half of the year, according to Dave Watson, president and CEO of Comcast Cable.

Speaking Monday at the UBS Global Media & Communications Conference, Watson said about 10,000 subscriber losses in Q4 are attributable to Hurricanes Helene and Milton. Comcast also expects broadband average revenue per unit (ARPU) to rise again in Q4, but come in at the lower end of its anticipated range of 3% to 4%.

A possible Q4 loss of 100,000 broadband subs compares to a loss of 65,000 that analysts were expecting. Comcast shares were down $3.80 (-8.79%) to $39.35 each in Monday afternoon trading.

Comcast's expectation for Q4 follows a Q3 in which it lost a better-than-expected 87,000 broadband subs (including 79,000 residential customers and 8,000 business customers), but would've gained about 9,000 broadband subs if not for losses tied to the demise of the Affordable Connectivity Program (ACP). Comcast's Q3 results also benefitted from a marketing surge related to the Summer Olympics, returning students and a temporary work stoppage at AT&T.

Watson noted that the broadband market "remains competitively intense" and that customer churn remains at near record lows.

Comcast, he said, is continuing its strategy to develop and promote packages that appeal to different segments of the market. Its Now-branded prepaid Internet product, for example, is largely targeted at a price-conscious part of the market that has been gravitating to fixed wireless access (FWA) options.

Comcast has yet to reveal how many customers are taking its relatively new Now Internet service, which (like competitive FWA options) isn't saddled with contracts and is designed for easy installations. "The game plan is to make it [Now Internet] more prominent for that segment," Watson said.

T-Mobile recently did some segments of its own via a new set of FWA packages, including a low-end tier that starts at $35 per month when customers bundle in T-Mobile's phone service.

Focus on connectivity

Watson said Comcast's top priority heading into 2025 is "growing the connectivity business lines," which includes home broadband, its growing mobile business and business services.

The exec reiterated that Comcast plans to expand its broadband footprint by another 1.2 million locations in 2025, building on its current footprint of about 63 million homes passed.

Comcast, he added, intends to be opportunistic with buildouts backed by government subsidy programs, including the Broadband Equity Access and Deployment (BEAD) program. "We'll participate where it makes sense," Watson said. "And if the rules are favorable, we'll be there. If they're not, then we won't."

Comcast is also pushing ahead with hybrid fiber/coax (HFC) network enhancements that include upstream-enhancing "mid-splits" and its rollout of DOCSIS 4.0.

Regarding business services, Comcast is adding footprint with an Ethernet-over-cable product. In 2025, Comcast expects to add 3.5 million business locations using that platform, which can support SLAs (service level agreements).

"We feel good about the long-range planning around broadband," Watson said.

New WBD deal gives Comcast bundling options

Watson was also asked to weigh in on Comcast's new multi-year agreement with Warner Bros. Discovery (WBD), which gives Comcast expanded streaming rights for the Max and Discovery+ services in the US.

Those rights will give Comcast the ability to bundle ad-supported versions of Max and Discovery+ in its streaming bundles, but Comcast has yet to say how it will bundle streaming services from WBD. Earlier this year, Comcast launched a "StreamSaver" bundle featuring Apple TV+ and the ad-supported tiers of Netflix and Peacock at the discounted rate of $15 per month.

For now, Comcast is not replicating Charter's approach, which is to bundle several ad-supported streaming services with its widely distributed pay-TV packages. But Watson said Comcast's new deal with WBD offers such flexibility.

"Our strategy is different in that we segment the marketplace. And for certain packages, we will include apps now and in the future where it makes sense," Watson said. "But from our standpoint, it won't necessarily be every tier of video where we'll do that ... We'd rather do something new and unique in terms of segmentation versus doing one-size fits all. But for the high end segment, it could make a lot of sense."