WideOpenWest (WOW!) posted its sixth consecutive quarter of record revenue from its high-speed data (HSD) service in Q1 2021, with executives highlighting the potential for a federal broadband subsidy program to boost future growth.
During an earnings call, WOW! CEO Teresa Elder noted the company grew its total subscriber count across broadband, video and telephony for the seventh straight quarter, with this rising 21,200 year on year to 859,200. She added 86% of new customers were signing up for standalone HSD service, a figure which marked a “significant increase” from 66% in Q1 2020.
The company grew its HSD subscriber count by 26,200 in the quarter, to a total of 823,800. Elder noted 88% of new customers took speed tiers of 200 Mbps or higher, up from 51% in Q1 2020. Uptake of higher speed tiers is lower for its existing customer base, but Elder said “customers are upgrading faster and faster” as applications increasingly demand more bandwidth.
Elder also provided an update on its broadband edge-out projects, which are intended to expand the reach of its network and boost customer additions, stating these continued “to deliver growth both in terms of homes passed” and subscribers.
By the end of Q1, the company noted the edge-out initiatives had reached 194,600 homes passed and contributed 48,800 new subscribers since their inception in 2016, with projects undertaken in 2020 yielding 1,100 new subscribers.
Though the projects continue to face Covid-related headwinds, “we expect to see some incremental acceleration of edge outs in the back half of this year,” Elder said.
CFO John Rego added it does not expect to return to pre-pandemic capex for edge outs, and will instead prioritize increased penetration.
All told, WOW!’s hybrid fiber-coax footprint spanned some 3.3 million homes and businesses across parts of Alabama, Florida, Georgia, Illinois, Indiana, Maryland, Michigan, Ohio, South Carolina and Tennessee as of end-Q1.
Emergency Broadband Benefit potential
Elder said the company has been approved to participate in the Federal Communications Commission’s Emergency Broadband Benefit (EBB) program when it launches on May 12, noting the monthly subsidies it will provide could boost its ability to upsell lower-tier subscribers.
“We have seen some upsell opportunities as customers realize that the additional speeds can help them work and learn from home more…I think once this subsidy program is in place and they have the roughly $50 a month for those kinds of services, I think people will take advantage of that,” she said.
The CEO continued “we do think that there could be especially a lot of prospects, so non-customers today who could be eligible within our footprint for the EBB program…We think it could be a significant number, but like I said it doesn’t start until next week, so we really don’t know what the uptick will be.”
Net income in Q1 jumped substantially year on year from $100,000 to $9.6 million, while revenue of $286.3 million was up 1%.
Subscription revenue accounted for the bulk of this ($267.8 million), with Other Business Services ($6.2 million) and Other Revenue ($12.3 million) making up the remainder. Sales from its HSD service grew 12% year on year to $152.7 million, while video revenue fell nearly 10% while telephony fell a little over 11%.