Comcast’s broadband business boomed in Q1, posting double-digit revenue growth and strong net additions, which helped propel its broader Cable Communications division to record customer relationship growth.
During an earnings call, CFO Michael Cavanaugh noted revenue from the Cable unit grew nearly 6% year on year to $15.8 billion, while net new customer relationships of 380,000 were up 2.4%. He said the latter figure marked “the best first quarter on record,” and was “driven by broadband” net additions of 461,000, which helped offset voice and video subscriber losses.
“This positive momentum has continued into the second quarter, and from what we see today, we anticipate total broadband net additions for the year to grow by mid-single digit levels compared to 2019, which aside from the extraordinary growth we had in an unusual 2020 was the best year in more than a decade,” he said.
Analysts at New Street Research said in a note to investors the guidance sends a “strong message that should put to rest any lingering questions about whether adds are still benefiting from Covid accounting decisions. The trends are just plain strong.”
Within the Cable division, broadband revenue grew 12% to $5.6 billion, business services increased 6% to $2.2 billion, advertising rose nearly 11% to $618 million and wireless jumped nearly 50% to $513 million. Video revenue was flat at $5.6 billion, while voice fell 3% to $871 million and “other” dipped nearly 7% to $413 million.
Consolidated revenue of $27.2 billion was up 2.2% year on year in Q1, with net income attributable to Comcast up 55% to $3.3 billion.
In addition to broadband revenue and subscriber growth, Cavanaugh said the quarter also yielded “the lowest broadband churn in our history.” Executives attributed this in part to the effect of bundling broadband with its Xfinity Mobile wireless product, which also posted strong net additions and turned a profit for the first time in its history during the quarter.
Comcast Cable CEO David Watson said on the call wireless was “good for broadband, it is helping broadband, we see the results in terms of churn,” adding the company will likely do “a bit more packaging with broadband and mobile” going forward.
Asked about a timeline for delivery of symmetrical broadband capabilities, Watson said “this is a focus for us over the next several years” but added “in the near-term to mid-term we’re in a very good position, and I do not see an incremental need for upgrade in terms of capital.”
He noted the company already deployed 1.2 Gbps downlink speeds across its entire footprint and pointed out upstream traffic remained “less than a tenth of downstream.”
“We constantly invest in the network, this is not something that just happened overnight,” Watson continued. “We’re making our infrastructure more efficient as we virtualize things like CMTSs, and we’re just taking cost out of how we deliver this. Couple that with a great DOCSIS standard, I think we’re in a pretty good position.”