The first quarter of 2022 proved to be a strong one for cable operators, but not in their traditional fixed broadband businesses. Rather, Comcast, Charter Communications and Altice USA posted strong mobile gains, prompting analysts at MoffettNathanson to reiterate calls to take cable’s wireless ambitions seriously.
All told, the trio of operators added 698,000 mobile lines in Q1. That compares to postpaid phone net additions of 1.24 million between AT&T, T-Mobile and Verizon, with the latter the only one of the three to record customer losses in the period.
Charter led the pack with 373,000 mobile net additions, with that figure coming in well above analyst expectations and the 300,000 net additions it posted in Q1 2021. It ended the quarter with a total of 3.9 million mobile lines, up 47.2% year on year.
Mobile revenue jumped 40.2% to $690 million, though this was more than offset by costs totaling $760 million. However, MoffettNathanson pointed out mobile sales have “soared to 5.2% of Charter’s total revenue” since the service launched in 2018.
Meanwhile, Comcast turned in what CEO Brian Roberts hailed as the “best quarter ever for Xfinity Mobile in terms of line net additions” since its launch in 2017. Gains for Q1 totaled 318,000, up from 278,000 the year prior. The operator had a total of nearly 4.3 million mobile customers as of the end of Q1. Wireless revenue of $677 million was up 32%.
And finally, Altice USA recorded 12,000 net additions, growing its overall customer base to 198,000 lines. As of the end of the quarter, penetration of its Optimum Mobile service stood at 4.3% of its overall residential customer base. Revenue for the segment was up 25% to $24 million.
On an earnings call, CEO Dexter Goei highlighted a new MVNO agreement Altice just struck with T-Mobile, stating the deal “gives us, among other things, much more flexibility on pricing, which is why we recently launched an aggressive one gigabyte promotion” that helped drive customer growth in the quarter. He added “We believe that as we continue to adjust our mobile and converged offerings, we can maintain a high level of mobile customer growth going forward and expect this will help improve broadband customer churn as well.”
Reflecting on the cable results in a note to investors, MoffettNathanson analysts noted “cable’s hybrid MVNO/MNO isn’t a poor-man’s substitute for an owned-and-operated network, it’s actually better. Over time, Charter and Comcast will move more and more traffic onto their own networks, leveraging their existing infrastructure for low-cost backhaul.” Already, Charter indicated 85% of its customers’ mobile usage flows through its Wi-Fi network.
“The wireless industry is much larger than the broadband business, and Cable’s market share gains are still accelerating,” MoffettNathanson concluded.