Wireless Growth Dialing Up at Comcast

While residential broadband growth remains anemic at Comcast, wireless subscriber numbers and revenues are accelerating. Residential broadband had been a revenue driver, but it won't be a significant one at least for the near future, CEO Brian Roberts said on a call with analysts Thursday. But Comcast is "still in the very early growth phase" in wireless, he said.

Comcast ended Q3 with 4.95 million wireless subscriber lines, up from 3.67 million the same quarter a year ago. Wireless revenues for the quarter were up 31% year over year, the company said. It said the 333,000 wireless lines added in Q3 were the most for any quarter since it began offering wireless service. It ended Q3 with 29.8 million residential broadband subscribers, up 400,000 year over year.

"Wireless is unambiguously Comcast’s next big growth engine," MoffettNathanson's Craig Moffett wrote investors. Its wireless business is growing at nearly a 31% annual rate, he said. Comcast "is clearly leaning into wireless" as it sees it as a big growth driver, he said, adding that the next step is to offload more traffic via 5G small cells using its citizens broadband radio service spectrum, reducing marginal costs. He said one potential is Comcast's joining with Charter Communications on getting mid-band spectrum from Dish Network so they could offload most of their traffic carried today on Verizon's mobile virtual network operator. "Such an approach would give Comcast (and its cable peers) what would be a decisive cost advantage," he said.

Adding 5G connectivity in areas where the company has a lot of traffic would be "a very good potential opportunity," Comcast Cable President Dave Watson said. He said Comcast and Charter are partnering on modeling potential savings for such a move.

The company is using mid-splits -- expanded amounts of spectrum for upstream data traffic -- now to boost upload speeds, Watson said. He said 20% of Comcast's footprint would be mid-split by year's end, with most of its territory done by the end of 2025. The next step is multi-gig symmetrical speeds via DOCSIS 4.0 and most of Comcast's footprint will start moving toward that in 2025, he said.

Comcast will report a net loss in broadband customers in Q4 due to Hurricane Ian damage in southwest Florida, President Mike Cavanagh said. The damage should mean tens of thousands of homes there that don't turn back on, he said.

Comcast had 16 million residential video subscribers at quarter's end, down from 17.8 million a year prior. Comcast ended the quarter with more than 15 million paid U.S. subscribers to Peacock, as well as another 14 million bundled and free users, Roberts said. NBCUniversal CEO Jeff Shell said Comcast's goal is sufficient Peacock subscribers "where we're fairly indifferent between content going on linear and content going on Peacock ...and we think we're well on our way to that." Asked about anticipated future cord cutting, Watson said he "anticipate[s] the changing nature of video to continue."

Q3 marked the first time Comcast's quarterly video subscription losses exceeded 10%, LightShed analyst Rich Greenfield tweeted.

Comcast revenues were down 1.5% year over year to $29.8 billion, due to Q3 2021 benefiting from the Tokyo Summer Olympics, Cavanagh said. Revenues also were down in part because of currency conversion regarding Sky and its international theme parks, he said. Saying Comcast is "focused on driving long-term growth during an increasingly challenged economic environment," Cavanagh said the company will see severance and other layoff-related expenses in Q4.