2021 Broadband Sub Growth Rate Seen Down 35%

Growth in U.S. net new broadband subscriptions fell 16% compared with the 2020 quarter when they got a COVID-19 boost, Pivotal Research Group's Jeff Wlodarczak wrote investors Friday. Subs were up modestly from Q1 2019. He expects 2021 net additions down 35% from record 2020 results but about 20% above 2019. Broadband household penetration finished Q1 at 86.8%, up 0.7% sequentially. Cable, with 98% share net new subscribers, saw a 24% drop year on year, up modestly from 2019. Telcos were “treading water” the last three quarters as DSL losses offset fiber-to-the-home gains; telcos added 18,000 in Q1. Some 19 million copper-based telco data subs “are ripe for cable to steal,” he said. Pay-TV results and outlook remain “ugly,” said the analyst, citing “bloodletting” at former DirecTV properties. Pay TV had a 2.1 million subscriber drop vs. 2.4 million in Q1 2020, the worst quarter, and virtual MVPDs lost 1.9 million. Traditional pay TV “remains a dead man walking,” and if players don’t have a credible direct-to-consumer strategy, “they are in trouble,” Wlodarczak noted. PRG is “increasingly excited” about Dish Network’s wireless buildout, noting “what could be a game-changing service with their [Amazon Web Services] relationship a key piece” (see 2104290045).