Cable Companies Have Another Cord-Cutting Problem: Broadband
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(Bloomberg) -- Cable companies have long contended with consumers who drop their TV bundles for streaming. But Comcast Corp. and Charter Communications Inc. are also losing subscribers on another front: broadband.
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Cable providers may lose up to 481,000 internet customers in the third quarter, according to estimates from SNL Kagan and Bloomberg Intelligence, the worst ever decline for the industry. The expiration of a government subsidy program and phone companies signing up home internet customers for wireless connections help explain the losses.
“The risk to cable is unlikely to ease anytime soon,” Bloomberg Intelligence analyst Geetha Ranganathan wrote in an Oct. 10 note. Verizon Communications Inc., T-Mobile US Inc. and AT&T Inc. are expected to report they added more than 900,000 broadband customers in the third quarter, including wireless home service and fiber, according to according to estimates compiled by Bloomberg.
The winners have been telephone companies selling fiber connections and home wireless service powered by their 5G networks. T-Mobile sells wireless internet plans for the home at $50 a month, compared with the average cable internet bill of $65 to $70 — an attractive proposition buoying the carriers as they get set to report third-quarter results next week.
T-Mobile added 406,000 home broadband subscribers last quarter and is projected to report another gain of 401,000 in the third quarter, the average of estimates compiled by Bloomberg. Analysts project Verizon will add 223,000 home wireless customers. AT&T, which got into the fixed wireless game a little later, is projected to sign up 147,000 fixed wireless subscribers in the third quarter.
Cable companies like Charter, the largest pay-TV provider, rely on three main lines of business for their revenue: video service, internet access and wireless phone service. Subscribers to two of those businesses, video and broadband, are shrinking. Comcast also gets revenue from NBCUniversal, its film, TV and theme-park operation.
Charter is the most vulnerable to the end of the government’s Affordable Connectivity Program, which offered subsidized internet access during the pandemic. The Stamford, Connecticut-based company had about 5 million such subscribers, according to Bloomberg Intelligence. It’s forecast to lose 248,000 internet customers when it reports quarterly results on Nov. 1, the fourth straight decline. Comcast, based in Philadelphia, is expected to shrink by about 128,000 customers, marking a year and a half of losses.