- Cable net adds may not return to growth for another four years due to an immigration slowdown, says New Street Research
- Not the brightest outlook given operators lost a lot of subs after the end of the Affordable Connectivity Program (ACP)
- Despite the gloomy forecast, wireless remains a silver lining for Charter and Comcast
Cable operators still have a long road ahead in turning the corner on their subscriber slump, according to New Street Research, as the future of household growth looks bleak.
Unsurprisingly, the Trump administration’s crackdown on U.S. immigration calls for slower population growth (though carriers don’t seem too worried yet about how that might impact net adds). Looking at population projections from the Congressional Budget Office (CBO), New Street predicts cable net adds “may not return to growth over the next four years,” with subscribers projected to decline at a pace of around 0.4% annually.
Operators are set to report Q1 2025 earnings later this month, and TD Cowen predicts the major cable providers will collectively lose around 263,000 subscribers as “sentiment still remains negative,” analysts said in a note in April.
Definitely not the brightest outlook, considering operators lost a sizable chunk of subscribers last year after the government’s Affordable Connectivity Program (ACP) expired. Charter was one of the hardest hit, as it had over 5 million customers on the subsidy. Whereas its peers Comcast and Altice USA lost about 1.4 million and 130,000 ACP customers, respectively.
2025 will likely see operators recover from ACP losses, but not enough that broadband net adds will bounce back to pre-pandemic levels, New Street said.
“We expect Internet household growth to slow steadily as internet penetration approaches saturation,” New Street analysts wrote. “Industry growth is slowing as we suspect some of the excess growth during the pandemic is catching up.”
Cable’s silver linings
Despite their subscriber downswings, Charter and Comcast have been doubling down on their rural footprint expansion.
“The pace of footprint expansion for both operators has been higher than national household formation,” New Street said, noting Charter’s deployment pace is faster than Comcast’s due to using government subsidies like the Rural Digital Opportunity Fund (RDOF).
Sure, cable companies have their issues, but Recon Analytics Principal Roger Entner believes they are “fundamentally well positioned,” partly because most of their customers are “very happy” with their cable internet.
Wireless offers another bright spot. Cable has “more upside potential in attractively priced mobile than it has downside in cable internet,” Entner told Fierce.
Comcast, which has been down in the broadband dumps, seems to recognize this. Company execs have said 2025 will see Comcast lean more into the wireless segment "than ever before."
We’ve seen both Charter and Comcast continue to build up their mobile virtual network operator (MVNO) lines, though not without some challenges. As TD Cowen has noted, the operators can have trouble convincing customers to switch from their existing wireless providers.
Still, “they will continue to lose internet lines but will more than make up for it in wireless connections,” said Entner.
TD Cowen similarly remains optimistic about cable’s momentum in the wireless space.
“Cable Mobile should still dominate, taking a potential record 60%+ of 1Q25 line adds, adding fuel to the ongoing convergence narrative,” said TD Cowen.