In this article, cable giant Comcast is shifting its focus to the wireless business for growth. The company reported a loss of 139,000 residential broadband customers in the fourth quarter and plans to emphasize its mobile business moving forward. Broadband has traditionally been a key driver of growth in the cable industry, particularly after the decline in cable TV customers. While broadband segment revenue remains steady, Comcast and other cable providers have experienced a slowdown in customer growth, which has raised concerns among investors.
Comcast’s shares fell by 11% following the announcement. Company executives revealed during an earnings call with investors that they intend to bundle mobile services with broadband to attract more customers. The slowdown in growth is attributed to various factors, including increased competition from wireless providers like Verizon and T-Mobile, who now offer home broadband options.
Comcast and Charter Communications both reported their first quarterly decline in broadband subscriber growth in 2022. Reasons cited for this decline include a slowdown in home sales, resulting in fewer new cable sign-ups, and a drop in additions following the surge in demand during the Covid pandemic lockdowns. The competition has intensified with the rise of fixed wireless offerings from Verizon and T-Mobile, providing an alternative to traditional cable broadband services.
Comcast acknowledges the growing competition and is focusing on mobile services to expand and retain its customer base. The company sees wireless as a crucial component of its broadband strategy, with over 7.8 million mobile lines currently in use, representing 12% penetration of its residential broadband customer base. Comcast launched Xfinity Mobile in 2017, while Charter introduced mobile services in 2018, with both companies reporting consistent quarterly gains in mobile lines since then.
Comcast and other cable providers rely on Verizon’s wireless network, as well as customers’ home broadband networks and Wi-Fi hotspots, for their mobile offerings. The integration of mobile services has helped reduce customer churn and attract new subscribers, driving revenue growth for these companies. Comcast aims to simplify its service bundles, following Charter’s lead in offering combined mobile and broadband packages. Charter recently made changes to its plans to include mobile services, emphasizing the importance of this integrated approach.
