Comcast Snags 538K Broadband Subs in Q4, 2M for Year 2020

Cable MSO continues to take market share in the broadband market with strong quarterly and yearly gains. 

  • Comcast

Comcast rode into another quarter of broadband growth as the cable MSO saw the fruits of its DOCSIS roll outs translate into new subscribers as COVID-19 has highlighted a greater need for high-speed broadband access.

During the fourth quarter, the cable MSO added 538,000 net new broadband customers and delivered Adjusted EBITDA growth of over 12 percent. For the year, Comcast added 2 million new high-speed internet customer net customers.

A strong showing in broadband drove up total customer relationships by 455,000 to 33.1 million. Residential customer relationships increased by 429,000 and business customer relationships increased by 26,000.

Like other large cable MSOs, Comcast saw declines in the landline voice and video segments: it lost 248,000 video customers and 24,000 landline voice subscribers. However, Cable Communications added 246,000 wireless lines.

Broadband was a big contributor to Comcast’s Cable Communications segment, which increased 6.3 percent to $15.7 billion in the fourth quarter of 2020. Growth was partially offset by decreases in voice, video and other revenue.

Brian Roberts, CEO and Chairman of Comcast, said during the fourth-quarter earnings call that the provider sees plenty of runway to increase its broadband subscriber base even further. 

“High speed internet drove our highest ever full year net customer relationship additions of 1.6 million, bringing us to 33 million total customer relationships,” he said. “Yet with just only 50 percent penetration of our footprint, there remains plenty of opportunity for future growth.”

Enhancing Operations, Product Sets

To maintain its broadband subscriber momentum, Comcast has taken steps to not only improve broadband speeds with network investments but enhancing its product set and pricing structure.

The cable MSO recently doubled the speeds on its Internet Essentials program for low-income families at additional charge. The service, which currently offers 25 Mbps downloads, will automatically be upgraded to 50 Mbps starting March 1.

Comcast’s Internet Essentials plan costs $9.95 per month and is available to qualifying low-income households. Families or individuals already receiving federal benefits through programs such as SNAP, Medicaid or WIC are eligible. This is the second time Comcast has increased the speed of its low-cost service. Just as most of the country was starting to shut down to the COVID-19 pandemic, it raised speeds 25 Mbps from 15 Mbps in March last year.

Additionally, Comcast launched its Peacock and Flex applications for free. Xfinity Flex is a free 4K-enabled streaming device and service that gives customers access to 200+ live channels and 10,000+ on-demand movies and shows.

Peacock, an OTT video streaming service owned and operated by the TV and streaming division of NBCUniversal, offers content from NBCUniversal studios and other third-party content providers, including television series, films, news, and sports programming. 

“We've continued to enhance our market leading competitive position, while keeping people connected, protected, informed and entertained by proactively managing our network, increasing broadband speeds, expanding our internet essentials program for low-income households, providing payment plans for customers struggling the most, and offering Peacock and Flex for free,” Roberts said.

On the operations side, Comcast has been able to cut customer care calls and on-premises visits by technicians while growing its customer base.

“In the past 12 months, we've reduced agent handled calls by over 16 million, and truck rolls by 1.6 million, all while adding more than 1.5 million net new customer relationships,” Roberts said. “Our efforts to reduce costs have been extremely successful. But what's even more exciting are the investments we're making to grow the overall business.”

Mobile Helps Broadband Retention

Wireline broadband is only one part of Comcast’s overall strategy. It is also finding success in taking share in the mobile industry, a factor that continued into the fourth quarter.

While its subscriber base is far smaller than traditional large wireless operators like AT&T and Verizon Wireless, Comcast is making an impact in the mobile market. Comcast added 246,000 wireless subscribers during the quarter and 774,000 wireless lines during the year. Due to an increase in the number of customer lines and an increase in device sales, wireless revenue increased 35.8 percent to $505 million.

The cable MSO is finding that finding that its fledgling mobile business is not only enabling it to take share in the overall wireless market, but it is helping it keep current broadband customers from churning to other providers.

“Mobile continues to perform very well for broadband retention,” said Dave Watson, president, and CEO for Comcast. “And so, we're committed to accelerating growth in mobile. And we mentioned this last time. And while the MVNO enhancement will be a nice step forward, there are a lot of other things that we're doing like, really going after every single sales channel that we have. We reopen retail in a safe mode, new safety protocols and every single sales channel, whether it's digital, all centers, you name it, we're really focusing on mobile.”

Comcast plans to play a part in the burgeoning 5G wireless market by finding ways to further bundle wireless offerings with its wireline broadband services.

“We're also leaning into 5G,” Watson said. “We'll participate very much in 5G and we're featuring mobile in packaging, with broadband, leading in some cases when there's a new product, NPI, whether it's Apple, Samsung, we use that moment to literally lead with mobile.”

As it expands its mobile presence, Comcast has updated its MVNO arrangement with Verizon. Watson said that this “will enable us to improve our range of offerings and acquire more customers more profitably.”

Additionally, Comcast is also weighing the options for the CBRS spectrum it won in the FCC auction. It bid $458 million for 830 Priority Access Licenses (PALs) in the shared 3.5 GHz band, and it could potentially tap 80 MHz of CBRS spectrum available under General Authorized Access (GAA) use.

“We are looking at and working on development plans around the targeted use of the CBRS spectrum in dense high usage areas and how we could offload traffic,” Watson said.

Comcast reported that overall revenue for the fourth quarter of 2020 decreased 2.4 percent to $27.7 billion. Net Income Attributable to Comcast increased 6.9 percent to $3.4 billion. 

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