Comcast lost a better-than-expected 87,000 broadband customers in Q3. But the operator would've gained about 9,000 broadband subs in the period if not for the demise of the Affordable Connectivity Program (ACP).
Comcast's broadband business showed some surprising strength as the operator said it would've gained broadband subscribers in Q3 2024 if not for the demise of the Affordable Connectivity Program (ACP).
Comcast lost 87,000 broadband subs in the third quarter, comprised of a loss of 79,000 residential customers and 8,000 business customers, lowering its grand total to 31.98 million (29.5 million residential and 2.47 million business). That compared to a year-ago loss of 18,000 broadband subs and a loss of 120,000 in the prior quarter.
Without the impact of ACP, Comcast said it would've gained 9,000 residential broadband customers, aided by back-to-school customer activity, a temporary AT&T work stoppage and some marketing initiatives and promotions tied to Comcast's Olympics coverage.
"Yes, Comcast's loss of 87K broadband subscribers was much worse than a year ago, but, for the third straight quarter, the loss was not nearly as bad as feared," MoffettNathanson analyst Craig Moffett explained in a research note (registration required).
Though the subscriber impact of ACP is now largely in the rearview mirror, Comcast is not making any broadband subscriber trend predictions for the fourth quarter of 2024. The company is still assessing the effects of Hurricanes Helene and Milton.
But the fundamentals of the broadband market, including competition from fixed wireless access (FWA) and fiber rivals, and low subscriber churn, have not changed, Dave Watson, president and CEO of Comcast Cable, said on today's earnings call. The underlying market remains "competitively intense," he said.
He pointed out that Comcast is starting to integrate AI into its sales channels in Q4, but didn't predict how that would affect subscriber trends in the near-term.
Comcast continued to expand its footprint. It added 320,000 homes passed to its network in Q3, putting it on pace to add about 1.2 million locations passed for full-year 2024.
Looking ahead, Watson reiterated that Comcast intends to participate in the Broadband Equity Access and Deployment (BEAD) program, but isn't ready to provide any specifics as the rules are finalized. So long as the final rules allow for "rational private sector investment" and don't impose price controls, "we do plan to participate with reasonable conditions … as long as they are consistent with our business goals," Watson said.
Comcast is also pushing ahead with its hybrid fiber/coax (HFC) network upgrade plan. About half of the company's HFC network has installed upstream-enhancing "mid-split" upgrades, and the aim is to have that portion of the upgrade largely complete by year-end. Comcast is also starting to deploy DOCSIS 4.0, which enables symmetrical multi-gigabit speeds. Comcast recently confirmed that it has deployed D4.0 to parts of ten markets covering about 1 million homes passed (Comcast ended Q3 with networks passing 6.35 million households and businesses). The pace should pick up amid the availability of new Full Duplex (FDX) amplifiers.
"We are in good position with the network plan," Watson said.
Pushing convergence
Comcast's Xfinity Mobile business continues to add lines. Comcast tacked on 319,000 mobile lines in Q3, up from a gain of 294,000 in the year-ago quarter and better than a gain of 302,000 lines expected by analysts. Comcast ended the quarter with 7.52 million mobile lines, noting that Xfinity Mobile penetration now represents about 12% of its domestic residential broadband subscriber base.
"For the market to begin focusing on the wireless opportunity, broadband subscribership doesn't need to grow. It only needs to stabilize. There are very encouraging signs that that is precisely what is happening," Moffett noted.
That home broadband/mobile duo is fueling Comcast's broader convergence strategy. Comcast President Mike Cavanagh said Comcast's converged footprint far exceeds the fiber footprints of the largest three telecom companies combined (a reference to AT&T, Verizon and T-Mobile).
Financial snapshot
Comcast posted consolidated revenues of $32.1 billion, up 6.5% year-over-year, beating analyst expectations of $31.7 billion.
Domestic wireless revenues rose 19.2% to $1.09 billion, and domestic broadband revenues climbed 2.7% to $6.53 billion. Moffett said Comcast's mobile business is on track to be a $5 billion business in 2025.
Business service revenues rose 4.5% to $2.42 billion.
Domestic residential broadband average revenue per user (ARPU), now touted by Comcast as the metric driving that part of the business, was up 3.6% to $73.78 in Q3.
Overall capital expenditures decreased 11.6% to $2.9 billion, and capex tied to Comcast's connectivity and platforms business dropped 6.5% to $1.9 billion on lower spending on scalable infrastructure and customer premises equipment.
Comcast shares were up 70 cents (+1.66%) to $42.94 in Thursday morning trading.
Editor's note: The story was corrected to note that Comcast ended Q2 2024 with 31.98 million total domestic broadband customers rather than 37.98 million.
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