Cable operators are poised to report another strong year of broadband subscriber growth in 2021 on the heels of last year’s record-breaking increases, but Barclays media analyst Kannan Venkateshwar warned that growth could slow substantially in 2022.
In a report Thursday, Venkateshwar noted that the momentum from 2020 — where cable operators added 4 million broadband customers — should continue into this year as the impact from stimulus programs to boost household income and government broadband subsidy efforts should keep churn low. But he added those programs also could have masked underlying problems that could resurface as some of the projects disappear.
In his report, Venkateshwar noted that assuming those stimulus programs accounted for a 10-basis-point reduction in non-pay churn implies growth this year would be lower than in 2019 for the top three cable operators — Comcast, Charter Communications and Altice USA — absent that factor. Then there is the impact of such programs on broadband penetration.
Venkateshwar estimated that as many as 700,000 broadband additions in 2020 came from stimulus and subsidies, and it is unclear how much of that growth will stick around for the long term. Add planned fiber and fixed wireless broadband rollouts from several telcos, an increased focus on network quality and the need for higher uplink speeds and “these factors could imply that 2021 broadband growth will remain unusually strong but may reverse next year,” Venkateshwar wrote.
The Barclays analyst estimated that Comcast, which added about 2 million broadband customers in 2020, will slip to 1.4 million additions in 2021 and 1.1 million in 2022. Charter, which led the top operators with 2.1 million broadband additions in 2020, will add 1.3 million in 2021 and 1.0 million in 2022, according to Venkateshwar. Highly penetrated Altice USA added 172,000 broadband customers in 2020 and is expected to add 84,000 in 2021 and 65,000 in 2022.
Other analysts have predicted a similar falloff in cable broadband growth. Last month, Sanford C. Bernstein media analyst Peter Supino predicted total cable broadband additions would slow to 2.9 million in 2021, 2.2 million in 2022 and 2 million by 2023.
Cable operators have warned investors not to expect the same levels of growth experienced during the height of the pandemic, and other factors like bundling broadband with wireless service could help boost subscriber levels. In addition, operators are continuously expanding their footprints into more rural markets through edge-outs and other programs, which could also mitigate any slowdown.
