The same day the company launched a major broadband initiative, Comcast executive VP, deputy chief financial officer and treasurer Jason Armstrong told an industry audience that while fixed wireless competition may be getting a lot of attention lately, the bigger threat to the cable business is coming from fiber broadband providers.
On Thursday, Comcast unveiled a multi-gig broadband strategy that will bring higher speeds and DOCSIS 4.0 capabilities to 50 million homes by the end of 2025. At the Bank of America Securities Media, Communications & Entertainment Conference, Armstrong said that the rollouts are further proof of Comcast’s broadband superiority.
Comcast’s broadband subscriber growth was flat in Q2, as the rest of the industry struggled with subscriber losses during the period. While there have been several factors attributed to the accelerated slowdown in cable broadband growth -- sluggish new home formation, minimal housing moves and the transition to a new federally subsidized program for low income families -- competition from both fixed wireless and fiber-based broadband providers have emerged as significant players. Fixed wireless access has gained momentum after T-Mobile reported adding 560,000 FWA customers in Q2 and yesterday Charter Communications CFO Jessica Fischer said while the technology hasn’t made a major dent in broadband growth, it is still a factor.
While Armstrong acknowledged fixed wireless, he saw fiber as a bigger threat. And he noted that during the period when fiber competition went from 0% to 40% of Comcast’s footprint, Comcast became the No. 1 broadband provider in America with 32 million customers, even adding 3 million subscribers during the pandemic.
“Dave [Watson, Comcast Cable CEO] and his team have had a terrific playbook against fiber,” Armstrong said. That will continue for the foreseeable future.”
But Armstrong was less concerned about fixed wireless, which he said is enjoying some popularity because of its low cost, but still falls short on speeds -- which average between 5 Megabits per second and 50 Mbps -- and reliability.
“Fixed wireless is newer. It’s new, it's national, a gross add equals a net add because there’s not any churn in the system, although there will be,” Armstrong said. “When you step back and say, ‘longer term, how do we compete, how do we win?’ fiber is the real long-term competitor.
“Fixed wireless is clearly having its moment right now, but when you think about the product offering and the long term competitive advantages, I think we feel great about our positioning,” he continued.
While he admitted that it is going to be more difficult to grow broadband subscribers in the current macro environment, Armstrong noted that Comcast has been down this road before. In 2017, the company’s largest competitor aggressively lowered its broadband prices, but Comcast held its ground, keeping its ARPU stable and subscriber growth rebounded the next year.
“You don’t chase disruption at the low end or the value conscious end of the base and disrupt the whole base by doing it,” Armstrong said. “...I think that’s the way you treat this.”
He also mentioned Comcast’s strong performance in wireless -- it added 317,000 Xfinity Mobile customers in Q2, its best Q2 ever -- and Business Services as growth drivers for the future.
“You add all this up and it tells you we have great growth runners in cable,” Armstrong said. "We absolutely have the ability to continue to grow that business.” ■
