Comcast added a meager 5,000 broadband subscribers in the first quarter of 2023. But on the bright side, its domestic broadband average rate per customer increased 4.5% and drove domestic broadband revenue growth of 4.8% to $6.3 billion during the quarter.
In many ways, Comcast is suffering from the whiplash of the pandemic, where broadband providers saw a huge boom in demand for connectivity but now are seeing a contraction.
At the Moffett Nathanson analyst conference today, Comcast CEO Brian Roberts said that during the pandemic “we pulled forward a lot of demand.” But now, people are moving less, and they already have their broadband connections. “So, there's a bit of maturation,” he said. “We’ve got to get some housing growth in order to get some unit growth.”
Digital divide
Billions of dollars are about to flow from the Broadband Equity Access & Deployment (BEAD) fund, which is driving all kinds of interest in delivering fiber broadband to unserved and underserved areas of the U.S. In addition, the wireless carriers, T-Mobile and Verizon, are deploying fixed wireless access (FWA) in many underserved areas where people have never been happy with their choices of low-speed cable or DSL.
Roberts made an interesting admission in today’s conversation at Moffett Nathanson. He said, “One thing — I don't think we competed as well for the lower end of the market. We had something called Internet Essentials, which we've been, for $10 a month, kind of promoting to underserved communities. And it was quite successful for many years. All of a sudden there were new government stimulus and all sorts of attention focused on a different end of the market.”
He said Comcast Cable President Dave Watson is now “competing better for this lower-end segment,” although he didn’t elaborate on specifically what Comcast was doing.
Roberts went on to ding FWA for its alleged capacity problems — that Verizon and T-Mobile are constrained in many areas because they won’t want to deplete valuable mobile wireless capacity to serve FWA broadband to homes.
“It seems like you're sharing resources for an increasing need in broadband capacity, and that's going to run into some limits,” said Roberts.
RELATED: Verizon’s Sampath says FWA isn’t vulnerable to capacity constraints
To sum up his opinion of FWA and fiber, Roberts said, “One group has to keep buying more wireless and sharing it, and the other group has to dig up the streets.”
He said cable’s plan to serve the internet of the future is called 10G, which will offer multi-gig symmetrical speeds. “Our method of doing that in cable is called DOCSIS 4.0. Over time, everybody has access to the product, it’s not something that diminishes when five people share it. Not something that's only available in this neighborhood but not available in that neighborhood. We don't have to dig up the streets.”
Roberts noted that the demand for broadband just keeps growing with no end in sight. And we’re now looking at endless possibilities with artificial intelligence. Roberts said, “There's a long runway for price appreciation in broadband.”
Wireless
Asked about Comcast’s Mobile Virtual Network Operator (MVNO) service, Roberts said, “I think it's very strategic, and we're very focused on it.” He noted that Comcast now has about 6 million mobile lines, and it’s 10% penetrated among its broadband customers.
“We have the best deal in the market because you're getting Verizon Wireless, and our Wi-Fi converged and our broadband network and all of our out-of-home hotspots all for something like 20, 30 or 40% less depending on what package you're in.”
He said Comcast has a good relationship with Verizon. “And we're free to build our own towers and cells and things if we choose to. And the deal goes in perpetuity. And oh by the way, anything they do for their consumer in a technological way, we get it the same day. That's one of the things we factored into the agreement.”
The Comcast CEO also mentioned that the company offloads a lot of its MVNO traffic onto Wi-Fi. This was something that Charter’s SVP of Emerging Technology talked about last week at the Wireless Infrastructure Association’s Connect(X) conference.
RELATED: Charter, Comcast share their Wi-Fi networks for MVNO services
Today, Roberts said, “Seventy percent of all the traffic is going over Wi-Fi with your mobile phone. You don't even realize that, and it's even better if you're a cable customer.”