June 13, 2024

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Comcast’s lack of broadband growth bothers investors

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Comcast Xfinity cable television installation truck parked on a street in front of a suburban home, San Ramon, California, May 17, 2018. (Photo by Smith Collection/Gado/Getty Images)

Smith Collection/Gado | Archive Photos | Getty Images

Comcast has tried to move investors away from focusing on residential broadband net additions. The market reaction to the company’s third quarter results suggests that isn’t working.

Comcast shares fell more than 6% in early trading Thursday after the company reported a loss of 18,000 residential broadband customers in the third quarter and warned losses will be larger in the fourth quarter.

Rising interest rates have slowed the buying and selling of houses, which has led to a decline in new home internet connections. Mortgage demand is at its lowest point in nearly 30 years. The 30-year fixed mortgage rate hit 8% last week for the first time since 2000. Additionally, new competition for home broadband from wireless providers such as T-Mobile and Verizon had added to Comcast’s lack of residential growth.

Comcast’s lack of broadband growth started last year, when the largest U.S. internet provider reported no additions in the second quarter of 2022 for the first time in the company’s history. Since then, Comcast has reported net broadband losses in three of the last five quarters.

Comcast executives have pushed investors to focus on broadband’s rising average revenue per user (ARPU) growth, driven by price increases, rather than net additions. Comcast’s residential broadband ARPU rose 3.9% in the quarter.

“As we continue to manage this balance, we expect ARPU growth to remain strong and our primary driver of broadband revenue growth with somewhat higher subscribers losses expected the fourth quarter
compared to the 18,000 loss we just reported in the third quarter,” Comcast Chief Financial Officer Jason Armstrong said during the company’s earnings conference call Thursday.

Shrugs for NBCUniversal

Comcast also owns NBCUniversal, a company…

2023-10-26 10:32:22

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