Cable One CEO Julia Laulis isn't losing any sleep over T-Mobile's plan to expand its fixed wireless home internet service to new locations that overlap Cable One's footprint.
Last month, T-Mobile said it was moving into the areas where AT&T announced it would no longer sell new DSL services to customers. Instead, AT&T said it wants to focus on building out its fiber-based broadband services, but it could take years for those deployments to hit some of the rural areas where the DSL customers are currently being served.
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According to a story by FierceWireless, T-Mobile plans to expand its LTE fixed wireless home internet pilot to more than 20 million households in parts of 450 cities, including areas that are being "abandoned" by AT&T during the Covid-19 pandemic.
Cable One also has its eyes on those AT&T DSL subscribers. During Thursday's third-quarter earnings call, Laulis was asked about competing with T-Mobile for those subscribers.
"As far as the AT&T [DSL announcement], as soon as we saw that was happening, we went and took a look," Laulis said, according to a Seeking Alpha transcript. "And the opportunity is about 80,000 homes in the footprint of overlap there. And our marketing people are on top of taking advantage of that situation. As it relates to T-Mobile, or any competitor, quite honestly, we are constantly scanning our local folks and making sure that we're on top of anything that's going on in our markets, whether it's builds or marketing or hiring."
While Laulis said she would never count T-Mobile out, she did throw some shade T-Mobile's way by saying "the speeds that they're talking about is not something that's worrying us."
"We like to think that we have a competitive mindset in that our reliable products and our above-average service will serve us well," she said.
While fixed wireless is seen as an emerging threat to Tier 2 and Tier 3 cable operators in rural areas, there still needs to be more infrastructure—namely towers—to install.
Cable One's Q3 numbers
Years ago, Phoenix-based Cable One became one of the first cable operators to shift its attention away from dwindling video subscribers and toward broadband services. That strategy, especially during the pandemic, has paid-off for Cable One.
In the third quarter, Cable One added more than 26,000 residential broadband customers on a sequential basis, which included roughly 5,000 new ValueNet customers. Cable One announced it was buying Emporia, Kansas-based ValueNet Fiber in June.
Cable One posted a 26.7% year-over-year increase in its broadband subscribers. Year-to date, Cable One has added 84,000 residential broadband customers for a total of 784,000 subscribers.
When asked about AT&T's more aggressive approach for deploying fiber-to-the-home (FTTH) during the earnings Q&A, Laulis said Cable One sees FTTH in just 8% to 10% of its footprint.
Another broadband-related trend, according to Laulis, is customers have been migrating toward faster broadband speeds even before the pandemic hit in March. Laulis said 70% of Cable One's broadband customers have speeds of 100 Mbps or higher, and that its 200 Mbps tier was its new flagship.
On the video side, Cable One lost 21,000 business and residential subscribers to drop its total to 277,000.
Revenues for the third quarter were $339 million compared to $285 million in the prior year quarter, representing an 18.9% increase. Cable One said the uptick was fueled by a residential broadband revenue increase of 30% and a business service revenue increase of 17.3%.
Cable One's net income was $66.3 million in the third quarter, which was an increase of 33.0% year-over-year. Adjusted EBITDA was $174.4 million, an increase of 24.6% year-over-year. Cable One's net profit margin was close to 20%.
Laulis said Cable One would launch an internet backup service for businesses by the end of the year. Going forward, Laulis said Cable One could see additional broadband demand due to more people moving from metro areas to rural locations due to the pandemic.
"We believe there would always come a time when people would need a more robust, reliable internet service in our markets," she said. "We did not know it would be pandemic-related. We kind of thought it would be a product that was driving it.
"But the folks that came in the door came from all walks of life. They could have been previous fiber customers, DSL customers or cell-only customers, i.e. no broadband in the home ever. And they came to us for speed and reliability."