Comcast has one problem: It doesn’t sign up many new broadband customers. But Comcast also has a solution: getting more money from existing subscribers.
Comcast impossible to add any broadband customers in Q2 2022, holding steady at 32,163,000 residential and business Internet customers combined. In his Q3 earnings report Released yesterday, Comcast said it gained just 14,000 broadband users in the recent quarter. Comcast also lost 561,000 video customers and 316,000 VoIP phone customers.
That’s why Comcast executives focused on ARPU (average revenue per user) in a earnings call yesterday. With new customers few and far between, Comcast is aiming to grow the average amount each existing customer pays.
“We expect ARPU growth to continue to be the primary driver of our residential broadband revenue growth in the near term,” said Comcast president and CFO Michael Cavanagh.
Comcast could get more customers by expanding into new territory or by connecting homes in neighborhoods where some people are stranded without broadband even though their neighbors have Comcast Internet service. But Comcast seems content to stay in its current turf and often refuses to supply new hookups unless they’re homeowners pay tens of thousands of dollars in advance—or even $210,000, as described in one of ours recent stories.
The CEO doesn’t expect much growth in subscribers
Comcast CEO Brian Roberts said the nation’s largest cable company was “still in a challenging environment in terms of depressed transfer activity and increased competition from new entrants.” Robert said there are four main growth drivers in Comcast’s cable division: “residential broadband units, residential broadband ARPU, wireless and business services.”
“While we do not expect residential broadband units to be a significant driver for now, we expect to maintain healthy growth in the other three, leading to continued strong financial performance in cable for the foreseeable future,” Roberts said. Cavanagh said “Broadband revenues increased 5.7% driven by growth in ARPU and our customer base year over year. Broadband ARPU increased 3.7% year over year , in line with the growth rate of the second quarter”.
Comcast also discussed ARPU growth in its earnings call three months ago, suggesting that price hikes helped boost per-user revenue in Q2. “In broadband alone, we had really healthy ARPU growth of 3.6 percent, half driven by rate, the other half just how we manage the layer mix,” said David Watson, CEO of the cable division. of Comcast.
Meanwhile, Roberts stressed yesterday that Comcast is “returning a significant amount of capital to our shareholders. We pay nearly $5 billion in dividends annually and have repurchased $9.5 billion of our stock since the beginning of the third quarter.”
Broadband revenue it was $6.135 billion during the three-month period. This works out to about $63.55 per subscriber per month, but includes both business and residential accounts. Third quarter 2022 broadband revenue increased from $6.107 billion in the second quarter of 2022 and from $5.8 billion from the third quarter of 2021.
Comcast has several ways to get more money from existing subscribers. That includes mobile plan sales: Comcast added 333,000 wireless lines in the quarter, reaching 4.95 million wireless lines total. Wireless revenues increased 30.8% to $789 million. Comcast also sells home security services.
But Roberts and Cavanagh’s statements specifically referred to “broadband ARPU,” suggesting they want to keep increasing broadband bills. This could include base monthly fee increases, fee increases that raise the cost over advertised prices, or requiring subscribers to purchase the Full XFi for $25/month add-on to get unlimited data and faster upload speeds.