Comcast had some challenges in its core broadband business in the second quarter 2022, as covered by Fierce Telecom. But its nascent mobile business was a bright spot in the quarter.
It reported 317,000 new mobile net line additions, resulting in the best second quarter results for its mobile business. This compared to about the same — 318,000 new mobile subs — in its first quarter.
The company said wireless has resulted in $700 million more incremental revenue in the past 12 months. “We’ve barely scratched the surface in the opportunity here at only 8% penetration of our residential broadband customers,” said Roberts.
Dave Watson, president and CEO of Comcast Cable, said the company will continue to be very aggressive with mobile. “I think there’s more that we can do as we integrate mobile into every sales channel,” said Watson. “Look for us to continue to be aggressive in regard to how we package each segment and leverage mobile.”
But he specified Comcast won’t “chase pricing down to the bottom,” and it will manage promotional intensity for the long haul. It will accentuate its strengths, including its Wi-Fi capability and it will highlight data from speed tests groups, such as Ookla, when they give Comcast high marks for its mobile service.
“We continue to evolve our competitive play book all the time,” said Watson. “But you won’t see us go down and chase discounting. There won’t be a dramatic shift in promotional activity.”
While wireless was a new bright spot for Comcast, the competition from telco fixed wireless access (FWA) was a dark spot.
Watson said FWA was impacting new connections. However, it was not having an effect on the company’s churn.
Roberts said, “Fixed wireless is a new entrant in the marketplace. And while there are likely to be significant long-term limitations, today’s excess capacity in wireless networks is creating what we believe to be a temporary opportunity targeted at value-oriented customers.” He said FWA is not having “any discernable impact” on Comcast’s churn, but its early growth appears to be a contributor to its lower connect activity.
“We believe fixed wireless has inherent performance and capacity limitations that sharply limit the number of people on a network using a given amount of spectrum, which should provide a natural cap on their overall industry penetration,” said Roberts.
Roberts noted that Comcast will keep a close eye on FWA, particularly in relation to local competition. “One of our great strengths is local competition,” he said. “We stay on it in a very granular basis.”
Despite the disappointment in broadband net adds during the quarter, Comcast did see an uptick in its business services segment. “Business services had another strong quarter of revenue growth, and in just over a decade we’ve grown this to nearly $10 billion in high-margin annual revenue, including the addition of almost $1 billion in the last 12 months alone,” said Roberts.
Business services revenue increased about 6% during the quarter, driven by increases in average rates per customer. The customer base grew by 10,000 additions in the second quarter.