Comcast continued to lose broadband subscribers in the third quarter, with executives predicting slightly higher losses for Q4. However, the company touted an uptick in broadband average revenue per user (ARPU).
Domestic broadband net losses were 18,000, a slight sequential improvement from 19,000 losses in Q2 but a sharp decline from the 19,000 net additions in Q3 2022.
CFO Jason Armstrong said on the call that while the back-to-school season “was a tailwind as expected” for the broadband market, Comcast’s residential broadband base “remains stable” both YoY and on a sequential basis.
Domestic broadband revenue increased 3.8% year on year to $6.37 million, which Armstrong said “continue[s] to be driven by very strong ARPU [growth]” of 3.9%.
He added Comcast this quarter pulled back on some of its promotional offers targeting “the lower end” of the market, so that the company “remain[s] consistent” with its strategy of “competing aggressively but in a financially disciplined way.”
“This means striking what we believe to be the appropriate balance between broadband subscriber growth and ARPU growth,” Armstrong said.
At an investor conference earlier this year, Comcast CEO Brian Roberts admitted the company in the past hasn’t “competed as well for the lower end of the market.” He added Comcast has improved in that regard, without providing specifics on what the company was doing.
As for passings, Comcast in Q3 reached over 62 million homes and businesses passed, representing a 1.5% year on year increase. Armstrong said the operator is on pace to meet or exceed its goal of 1 million new passings for 2023.
Notably, Comcast this quarter began rolling out DOCSIS 4.0. Customers in Colorado Springs are the first who can sign up for symmetrical multi-gig cable internet, and Comcast plans to expand DOCSIS 4.0 to the Atlanta and Philadelphia markets before year-end.
Commenting on DOCSIS 4.0 progress, Comcast Cable CEO Dave Watson said the operator is about “30% [of the way] in terms of mid splits.”
Comcast is using a full duplex (FDX) approach for DOCSIS 4.0, which involves the simultaneous transmission of data upstream and downstream using the same spectrum.
“We’re really focused on this seamless integration that connects HFC to fiber and we’ll be at 40% next year,” Watson said.
Consolidated revenue of $30.1 billion was slightly up from $29.8 billion in the year-ago quarter. Net income was $4 billion, compared to a net loss of $4.6 billion in Q3 2022.
Edward Jones analyst David Heger commented this was “a solid quarter” for Comcast, even though internet subs were “weaker than expected, as the business continues to experience normalization from pandemic highs and increased competition.”