Comcast looks to edge outs as broadband adds drop 43% YOY

Comcast executives talked up plans to reach at least 800,000 new passings in 2022 through edge outs, pointing to further expansion of its footprint as one way to offset lower move activity which contributed to a steep drop in its broadband net add growth in Q1.

The operator gained 262,000 broadband customers in the quarter. However, CFO Mike Cavanagh said on an earnings call about a third of these were the result of a one-time accounting benefit related to the end of pandemic-related programs. The net add figure was down 43% year on year from 461,000 in Q1 2021. Absent the accounting benefit, MoffettNathanson analysts noted “net additions of ~180K would have been a miss.”

Comcast Cable CEO Dave Watson acknowledged the operator is facing stiff competition from fiber and fixed wireless players, but insisted it is holding its own in the market. He pointed to record low churn in the quarter as a proof point, though didn’t disclose the exact metric.

“We have a real game plan that we’ve had and added to over time where we segment the marketplace, we compete at a very granular basis going where there’s new launches and focus on leveraging every product that we have and most certainly we’re playing offense with mobile,” he said.

Watson argued macro issues around lower move activity and, by extension, lower gross adds are the real issue. However, he said the operator is looking to edge outs as one way to counter this trend. These include expansion within its traditional cable footprint, in commercial buildings and rural areas. Watson said it has been aggressively pursuing funding opportunities in the latter arena.

“We’re actively evaluating areas of potential opportunities and submitted a lot of applications where we’ve determined that this is going to provide a reasonable and economical way to serve these new areas,” he said. “It’s early, way early, on these things but we’re having success and we’re getting some wins on these programs.”

While many investors focus on net additions, MoffettNathanson noted “what matters is ultimately total broadband revenue growth.” And Comcast delivered strong performance on that front.

Consolidated revenue of $31 billion was up 14% year on year, with net income attributable to Comcast up 6.6% to $3.5 billion. Sales for the company’s Cable Communications division rose 4.7% to $16.5 billion, with broadband revenue within that category up 8% to $6.1 billion.