Comcast wants people to pay more as customer growth stalls

Comcast has an issue: it is not getting many new broadband prospects. However Comcast additionally has an answer: get more cash from current subscribers.

Comcast failed to add broadband prospects in Q2 2022, holding at 32,163,000 residential and enterprise Web prospects mixed. In his Q3 revenue report launched yesterday, Comcast mentioned it solely gained 14,000 broadband customers within the final quarter. Comcast additionally misplaced 561,000 video prospects and 316,000 VoIP cellphone prospects.

That is why Comcast executives centered on ARPU (common income per consumer) in a earnings call yesterday. With new prospects few and much between, Comcast is aiming for progress within the common quantity paid by every current buyer.

“We count on ARPU progress to proceed to be the first driver of our residential broadband income progress within the close to time period,” mentioned Comcast President and Chief Monetary Officer Michael Cavanagh.

Comcast might appeal to extra prospects by increasing into new territories or connecting houses in neighborhoods the place some persons are stranded with out broadband, even when their neighbors have Comcast Web service. However Comcast appears content material to stay to its present territory and sometimes refuses to offer new connections until the homeowners pay tens of thousands of {dollars} in the front—and even $210,000, as described in considered one of our recent stories.

The CEO doesn’t count on robust progress within the variety of subscribers

Comcast CEO Brian Roberts mentioned the nation’s largest cable firm is “nonetheless in a difficult surroundings by way of depressed shifting exercise and elevated competitors from new entrants.” Robert mentioned there are 4 principal progress drivers in Comcast’s cable division: “residential broadband items, residential broadband ARPU, wi-fi, and enterprise providers.”

“Whereas we do not count on residential broadband items to be a major driver at the moment, we count on to keep up wholesome progress within the different three, resulting in continued robust monetary efficiency from cable for the foreseeable future,” he mentioned. mentioned Roberts. Cavanagh mentioned that “Broadband revenues elevated by 5.7% pushed by ARPU and buyer progress in comparison with final yr. Broadband ARPU elevated by 3.7% year-over-year, which is in step with the second quarter progress charge.”

Comcast additionally mentioned ARPU progress in its earnings name. three months ago, suggesting that value will increase helped enhance income per consumer within the second quarter. “In broadband alone, we had actually wholesome ARPU progress of three.6%, half primarily based on pricing, the opposite half on how we handle the extent combine,” Comcast’s cable division CEO David Watson mentioned on the time.

In the meantime, Roberts identified yesterday that Comcast “returns a considerable quantity of capital to our shareholders. We pay almost $5 billion in dividends a yr and have repurchased $9.5 billion of our inventory for the reason that begin of the yr till the third quarter.”

Broadband revenues

Broadband revenues was $6.135 billion in the course of the three-month interval. This works out to round $63.55 monthly per subscriber, however consists of each enterprise and residential accounts. Broadband revenues for the third quarter of 2022 are up from $6.107 billion within the second quarter of 2022 and $5.8 billion for the reason that third quarter of 2021.

Comcast has a number of methods to get more cash from current subscribers. This consists of the sale of cell plans – Comcast added 333,000 wi-fi traces in the course of the quarter, reaching 4.95 million whole wi-fi traces. Wi-fi revenues elevated 30.8% to $789 million. Comcast additionally sells residence safety providers.

However Roberts and Cavanagh’s statements referred particularly to “broadband ARPU”, suggesting that they wish to maintain growing broadband payments. This might embrace will increase in base month-to-month charges, charge will increase that increase the associated fee above marketed costs, or requiring subscribers to buy the Full xFi at $25 per month add-on with a view to get limitless knowledge and better obtain speeds.