“Human sacrifice, dogs and cats living together … mass hysteria!”
Dr. Peter Venkman, famously played by Bill Murray in the 1984 film comedy Ghostbusters, could have just as easily been talking about the state of the current U.S. telecommunications industry.
Cable companies are now wireless operators, with Comcast having its most customer additions ever in the third quarter for its five-year-old Xfinity Mobile service and surpassing 5 million service lines.
And wireless companies are now seriously eating into the dominant market share long enjoyed by cable in-home broadband. T-Mobile on Thursday announced the addition of 578,000 high-speed internet customers in the third quarter, most of them using 5G fixed wireless access (FWA) technology.
That follows Verizon's report last week of its best-ever quarterly FWA growth, tacking on 342,000 subscribers in Q3.
T-Mobile’s “5G Home Internet” service is priced at $50 a month, severely undercutting competition from incumbent cable operators.
Cable operators, which saw their residential and customer broadband ranks swell mightily amid the pandemic, are mostly flat in terms of subscriber growth these days.
Comcast, which didn’t add any broadband users in the second quarter, reported narrow gains of 10,000 residential internet customers and 5,000 business subscribers. Charter announced the addition of 61,000 residential broadband users Friday in Q3, reversing a loss of 42,000 last quarter.
Largely because of their flat broadband growth, Wall Street has hammered both of the top two U.S. cable companies this year. Comcast spiked Thursday after it largely met equity analyst guidance on revenue and other key metrics. But overall, since the beginning of 2022, its stock is down around 40%.
Charter is up over 4% on the Nasdaq Friday after its morning Q3 earnings report, but it's also down around 40% since the beginning of the year.
Also read: Cable Broadband Customer Growth Was Down by Around 500K in Q1 ... but Fixed Wireless Added 500K
Cable executives have largely dismissed the competitive threat posed by FWA, noting that wireless networks don't offer the capacity and performance needed to effectively service a mass user base once scale gets a lot bigger.
Of course, in a recession, charging a monthly premium of $20 or more to customers makes that a harder sell.
Still, on Thursday, during Comcast’s Q3 earnings call, Comcast Cable CEO Dave Watson largely maintained the industry posture.
”There hasn’t been a notable shift in the competitive environment from either fiber or fixed wireless,” Watson told equity analysts. “It’s almost three years since we’ve competed against those early launches in fixed wireless. ... We take it seriously ... Our goal and the game plan is to focus on our ubiquitous network advantage that we have, not looking at our competitors so often at a very local level have to make trade-offs on their network decisions.”
Watson said that ultimately, cable’s transition to next-generation “10G” networks — a marketing umbrella that includes multi-gigabit DOCSIS 4.0 technology — will sway momentum back to the cable industry.
“Our DOCSIS 4.0 game plan is a very robust one,” he said. “It puts us in position to deliver capacity and speeds on every application that's out there. Our goal has always been to develop a better product and deliver it. That’s very different from our competitors, where you just add value, and now including mobile. But we just have a different broadband product that's better in terms of overall speed and coverage and Wi-Fi.” ▪️
