- TD Cowen expects cable sub losses to hit near record levels in Q3
- Perhaps cable operators will indicate whether their repackaging of broadband plans is working, or not
- And now there’s a new cable threat — Meta’s Muse can help customers price shop
Cable operators might be dreading their upcoming Q3 2026 earnings calls. According to the analysts at TD Cowen, led by Gregory Williams, their broadband subscriber losses could hit record levels during Q3.
“Comcast set the tone with bearish commentary in September as we expect cable sub losses near record levels at -428,000,” wrote Williams.
The “bearish commentary” refers to Comcast’s CFO Jason Armstrong speaking at a Goldman Sachs conference about the “irrationally” low broadband prices being offered by fiber companies.
After Armstrong’s comments in September, cable stocks took a step down.
“Unfortunately, the Comcast commentary doesn't sit well with investors as the term ‘irrational’ is relative,” wrote Williams. “For example, AT&T has been vocal about sacrificing wireline ARPU for wireless wins to bolster its convergence strategy. In other words, AT&T can take down prices but still be [customer lifetime value] CLV neutral/positive with converged customers.”
Analyst Craig Moffett with MoffettNathanson agreed that investors have not responded well to Armstrong’s comments. And the timing of the comments wasn’t great because cable investors were already on edge about broadband pricing. “Armstrong’s comments about ‘irrational competition' were the cherry on top of an already bad year for cable investors,” wrote Moffett. “Broadband ARPU trends for Comcast, Charter, Optimum and Cable One have been bad all year and, as of Q2, were still getting worse.”
But in terms AT&T’s fiber broadband pricing, Moffett noted that AT&T recently lowered its broadband discounts. On September 21, AT&T raised its first-year promotional price for 1 Gig in most markets by $15 per month; and then more recently it raised the price by another $5 per month.
How fiber broadband pricing ultimately plays out is anyone’s guess. But Comcast's bearish messaging is also casting doubt as to whether cable's aggressive repackaging of broadband plans is working. Perhaps cable executives will address that on their Q3 calls.
Meanwhile, fixed wireless access and satellite broadband will continue to chip away at cable subscribers, a fact regularly mentioned by cable executives.
And now, there’s a new fear that Meta’s Muse — its personal AI agent — will give consumers the ability to easily price shop for broadband services. The analysts at TD Cowen say they’re mostly dismissive on the Muse fears, but cable is admittedly more vulnerable for price optimizations.
Who knows, perhaps Meta’s Muse will provide consumers with the type of detailed broadband pricing information that the prior Federal Communications Commission wanted with broadband nutrition labels, but which got watered down by the current FCC.
What’s the takeaway for cable stocks from all the pricing fluctuations among broadband competitors?
“All said, cable stocks still need a subscriber and ARPU resting place for investors to feel comfortable,” wrote Williams. “With the Charter/Cox deal now complete, perhaps the next move is Charter/Comcast.”
Read more about cable on Fierce Networks:
Comcast CFO scratches his head about ‘irrationally’ low fiber broadband prices
FCC revises broadband nutrition label rules
Charter’s CFO says cost synergies from Cox will exceed $1B