Cable's wireless blitz picks up more steam

US cable operators are struggling to return to broadband subscriber growth, but their mobile strategies continued to bear fruit in the second quarter of 2024.

Cable's share of total mobile phone net adds (both post-paid and pre-paid) was roughly 54% in the quarter, MoffettNathanson found in its latest analysis of the US mobile market (registration required).

While that was down from 75.2% in Q1 2024, the research firm notes that cable's total take is "likely an underestimation" since the tally does not include net additions from Cox Communications, which has pledged to ramp up subscriber growth this year following its national launch in January 2023. That total also does not include mobile line totals from other small and midsized operators that have launched mobile in recent weeks and months, including Mediacom Communications, Breezeline and Astound Broadband.

Of that midsized group, Mediacom has been ramping up its mobile marketing in the wake of its recent service launch, Jeff Moore, principal of Wave 7 Research, noted in his latest postpaid competition report. He estimates that Mediacom's mobile-focused "Get Ready" TV ad launched on July 24 has already aired about 2,500 times. Mediacom, he added, is also promoting mobile in a bill stuffer that offers savings of about 30% versus the national carriers.

(Source: Wave7 Research)

Comcast (+322,000), Charter Communications (+557,000) and Altice USA (+33,000) posted 912,000 net mobile line adds in Q2, the highest total since Q3 of 2023, MoffettNathanson analyst Craig Moffett noted. The Q2 tally takes the US cable industry's total past 16.4 million mobile lines.

While those cable operators do not disclose wireless EBITDA, he points out that Charter revealed it achieved positive standalone wireless EBITDA for the first time at the end of the quarter.

Moffett also estimates that US cable's share of the post-paid mobile market reached a new all-time high of 17.5% in the quarter. That compared to T-Mobile (30.3%), Verizon (29.1%) and AT&T (22.3%).

Hitting the low end, exploring the high end

Moffett attributes the bulk of US cable's mobile growth to relatively lower pricing when compared to many of the plans offered by AT&T, T-Mobile and Verizon.

And the end of the Affordable Connectivity Program (ACP) could also play in cable's favor. Charter, for example, is offering a free unlimited mobile line for one year to help customers absorb the impact of the program's end.

"With the end of ACP impacting lower income segments, Cable's low-priced offering also likely further resonated with cohorts looking for affordable wireless options," Moffett explained.

He also points to recent data from Navi, a phone and service plan comparison website/service, finding that prepaid customers have been gravitating to Charter and Comcast mobile as the ACP wound down. Navi observed that around the time Charter started to offer that free mobile line, shopper volume increased by about 30% from Charter broadband IP addresses among consumers in lower income zip codes that were using a prepaid wireless service.

"This could be an indication that Charter (Spectrum) has been successful in mitigating the loss of ACP home broadband customers through Spectrum Mobile and its free mobile line offer," Moffett said.

There are also signs that cable is also moving up-market with mobile. For example, Charter's new "anytime upgrade" offer for Unlimited Plus subs and a new device protection plan introduced in April could expand the operator's scope. "Without question, their product is evolving in the direction of appealing to a larger segment of the market, particularly traditional post-paid wireless customers with high-end handsets," the analyst added.

US cable operators are also starting to utilize handset subsidies to attract new customers. Comcast, Moffett points out, has introduced an iPhone 15 subsidization (free, or $830 off) with qualifying trade-ins.

While that promo was limited to customers who added a new line and was offered only through August 11, "it provides some evidence that their resolve not to participate in aggressive handset promotions is cracking, and given the sharp re-acceleration in Comcast's subscriber gains, it is (not surprisingly) working," Moffett said.