Getty Images | Various photography
Comcast has a problem: It doesn’t sign up many new broadband customers. But Comcast also has a solution: getting more money from existing subscribers.
Comcast failed to add broadband customers in the second quarter of 2022 and was stable at 32,163,000 combined consumer and business Internet customers. In its Q3 earnings report released yesterday, Comcast said it gained just 14,000 broadband users in the last quarter. Comcast also lost 561,000 video customers and 316,000 VoIP telephone customers.
That’s why Comcast executives focused on ARPU (average revenue per user) in a revenue call yesterday. With few new customers, Comcast aims to grow in the average amount each existing customer pays.
“We expect ARPU growth to continue to be the primary driver of our residential broadband revenue growth in the near term,” said Comcast President and CFO Michael Cavanagh.
Comcast could gain more customers by expanding into a new area or connecting homes in neighborhoods where some people are stuck without broadband even though their neighbors have Comcast Internet service. But Comcast seems content with its current territory, often refusing to provide new connections unless homeowners pay tens of thousands of dollars upfront — or even $210,000, as described in one of our recent stories.
CEO doesn’t expect much subscriber growth
Brian Roberts, CEO of Comcast, said the nation’s largest cable company “continues to find itself in a challenging environment in terms of reduced moving activity and increased competition from new entrants.” Robert said there are four key growth drivers in Comcast’s cable division: “residential broadband units, residential broadband ARPU, wireless and business services.”
“While we don’t expect residential broadband units to be a major driver for now, we expect healthy growth in the other three, leading to continued strong financial performance in cable for the foreseeable future,” Roberts said. Cavanagh said that “Broadband revenue grew 5.7 percent, driven by ARPU and customer base growth compared to last year. Broadband ARPU grew 3.7 percent year over year, in line with the growth rate in the second quarter.”
Comcast also discussed ARPU growth in its earnings call three months ago, suggesting that price increases helped boost revenue per user in the second quarter. “In broadband alone, we had really healthy ARPU growth, 3.6 percent, half of which was rate driven, the other half just how we manage the tier mix,” said David Watson, CEO of Comcast’s cable division.
Meanwhile, Roberts emphasized yesterday that Comcast is “returning a significant amount of capital to our shareholders. We pay nearly $5 billion in dividends annually, and we’ve repurchased $9.5 billion of our stock through the third quarter so far.”
Broadband revenue
Broadband revenue was $6.135 billion during the three-month period. That works out to about $63.55 per month per subscriber, but includes both business and personal accounts. Broadband revenue in the third quarter of 2022 has increased from $6.107 billion in the second quarter of 2022 and from $5.8 billion since the third quarter of 2021.
Comcast has multiple ways to get more money from existing subscribers. That includes cellular subscription sales — Comcast added 333,000 wireless lines in the quarter, reaching a total of 4.95 million wireless lines. Wireless revenue grew 30.8 percent to $789 million. Comcast also sells home security services.
But Roberts and Cavanagh’s statements specifically referred to “broadband ARPU,” suggesting they want to keep increasing broadband bills. That could be increases in monthly base rates, fee increases that increase costs above advertised prices, or require subscribers to purchase the $25-per-month xFi Complete add-on to get unlimited data and faster upload speeds.
