Cable One posted a $4.54 jump in residential broadband average revenue per user (ARPU) in Q2, citing increased take rates of higher service tiers.
During an earnings call, CEO Julie Laulis stated sell-in for service tiers of 200 Mbps or greater hit 78% in the quarter, with its 1-gig plan take rate reaching 15%. This helped push residential data ARPU from $73.80 in Q2 2020 to $78.34 in the recent period.
Laulis noted customers who have signed up for the Federal Communications Commission’s (FCC) Emergency Broadband Benefit (EBB) program are upgrading service tiers “at three times the rate of non-EBB customers.”
“So these are people that are taking this opportunity to get more speeds, more throughput, more data but with the government footing a portion of that bill,” she said.
As of July 28, the FCC said more than 4 million households had enrolled in the EBB program, which offers a $50 to $75 per month discount on broadband service for eligible households.
The CEO noted approximately 5,000 people have enrolled in the program with Cable One, with just under 10% of these new customers. In an apparent reference to expected government funding for an extended version of the subsidy program, Laulis said the EBB enrollment process “is a bit onerous right now” but added “it will be interesting to see as we pivot to a longer-term program to see what we can bring on with that.”
The operator ended the quarter with 923,000 residential data primary service units (PSUs), up 21.7% or 165,000 year-on-year. Residential data penetration increased 2.7% to 38.5%.
Cable One’s net income jumped 69.7% year-on-year to $106.2 million in Q2. Revenue of $401.7 million included $50.6 million from its recently acquired Hargray operations and was up 22.4% year-on-year. Within this, Residential Data revenue increased 26.6% to $207.6 million and Business Services sales rose 31% to $76.6 million. Residential Video and Residential Voice revenues were roughly flat at $87.2 million and $12.1 million, respectively.
CFO Steven Cochran noted on an earnings call that excluding Hargray’s contributions consolidated revenue would have increased 7%, with Residential Data revenue up 15.7%, and Business Services revenue up 5.6%.