It's too early to tell if fixed wireless will take market share away from cable companies in coming years or if congestion issues force wireless providers to constrain the number of users, said Craig Moffett, a telecom analyst at MoffettNathanson. The combination of promotional pricing and stalled growth may end up turning broadband into something that looks more similar to the wireless business, which has been stymied by price wars and low profit margins for years. It's also that new competition will lead to lower prices. The fear among cable shareholders isn't just that Comcast and Charter may be at the end of an era where it comes to broadband growth.
Gabelli Funds own Charter, Comcast, Verizon and T-Mobile. "You're probably not going to get reinvigorated broadband growth in the next six months." "There's not an obvious catalyst," said Marangi. Still, if fixed wireless continues to eat into cable broadband growth, Comcast and Charter will need to convince investors there's another reason to put their money in cable, said Chris Marangi, a portfolio manager at Gabelli Funds. "We are not seeing fixed wireless have any discernible impact on our churn," Roberts said during Comcast's earnings conference call July 28. Roberts disputed that customers are ditching Comcast for any fixed service, claiming T-Mobile's growth is based on new customers. T-Mobile also noted that results of Ookla's nationwide speed test in July that showed its 5G network (187.33 Mpbs) topped Comcast and Charter broadband (184.08 and 183.74, respectively) in terms of average speed. "Demand continues to build from dissatisfied suburban cable customers to underserved customers in smaller markets and rural areas," T-Mobile CEO Mike Sievert said during the company's earnings conference call. T-Mobile said more than half its new customers switched from cable. In the second quarter, T-Mobile added a whopping 560,000 new fixed wireless customers as Comcast and Charter lost broadband subscribers. Just as T-Mobile grew in the wireless industry by offering lower prices, it appears to be doing the same to cable. New Street Research estimated average monthly cable broadband revenue per use is nearly $70, and will likely rise to more than $75 by 2025. T-Mobile charges a flat $50 monthly fee for its fixed wireless service. And in the long run, I don't know how viable the technology holds up," Roberts said at the Morgan Stanley Technology, Media & Telecom Conference. "We've seen lower price, lower speed offerings before. Cable, which runs wires directly to the home, has no such limitation. Moreover, fixed wireless is constrained by congestion on 5G airwaves. Standard cable (and fiber) broadband can typically deliver speeds about twice as fast. In March, Roberts dismissed fixed wireless as "an inferior product." T-Mobile has promised half the country will get speeds of at least 100 megabits per second by the end of 2024. Verizon said earlier this year it plans to have between 4 million and 5 million fixed wireless customers by the end of 2025. As of April, T-Mobile high speed internet is available to more than 40 million households across the country. Then about three years ago, T-Mobile launched its fixed wireless product, a 5G high-speed broadband product that functions as an alternative to cable broadband. Comcast shares are off about 25% year to date, while Charter is down about 33%.Īnd while pandemic and macroeconomic trends may ease with time, Roberts also acknowledged in the earnings call another reason for the broadband dip: new competition.įor decades, cable companies enjoyed having little competition in many regions of the country for high-speed internet.
The abrupt end to the streak of broadband growth is a major concern for investors in Comcast and Charter, which are trading near two-year lows. In the first year of the pandemic, he noted the company added nearly 50% more customers than its prior annual average growth. "There's been a dramatic slowdown in moves across our footprint," said Roberts during Comcast's earnings conference call last month. Comcast specifically pointed to fewer people moving as the main reason for lower connections. Charter dropped 42,000.Ĭomcast CEO Brian Roberts and Charter counterpart Tom Rutledge blamed macroeconomic trends and stronger than normal gains during the pandemic as primary reasons for the losses. Comcast lost 10,000 residential customers and noted it's down an another 30,000 in July. households paying Comcast and Charter for high-speed Internet is falling for the first time, with both companies reporting residential broadband declines in the second quarter.
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