The slowdown in cable broadband subscriber additions may be even slower than anticipated after executives at two of the top three publicly traded cable companies -- Comcast and Altice USA -- hinted that customer growth is trending at an even more decelerated pace than expected. 

Comcast Cable CEO Dave Watson touched off a mini firestorm on Dec. 7, telling the virtual audience at the UBS Global TMT Virtual Conference that he expected to end 2021 with 1.3 million additional broadband subscribers. That is lower than the 1.4 million Comcast added in 2019 and implies that Comcast would add about 185,000 high-speed data customers in Q4, its lowest growth since Q2 2017. 

Most analysts had expected Comcast to end 2021 with about 1.4 million additional broadband customers. In a recent research report, MoffettNathanson principal and senior analyst Craig Moffett predicted Comcast would add about 286,000 broadband customers in Q4. Moffett expects Charter to add 271,000 broadband customers and Altice to add 3,000 high-speed internet subscribers in the period. 

While Charter may well hit Moffett's target, chances are that Altice USA, coming off a third quarter where it lost 13,000 broadband customers, could see negative growth in Q4.

“We probably are trending -- and we still have a big month of December coming up -- slightly negative in Q4, which probably leads us to be down in a range of 5,000 to 10,000 for the year,” Goei said at the UBS conference.

He added that the declines are in markets where Altice USA competes with Verizon Communications’ Fios Internet product, which Goei described as heavily promotional. 

“These losses are in Fios zones,” Goei said. “I think Fios has been saying they have not lost momentum. We’ve slowed momentum relative to Fios and we really need to drive to the first quarter when we have a better mobile product.”

The news sent Comcast shares down 7% on Dec. 7, as well as the rest of the sector. At the end of the day, losses eased a bit -- Comcast stock closed down 5%, Charter down 3% and Altice USA fell 2%. But the fear that sluggish broadband growth could last a while longer didn’t seem quite as irrational as the day before. Between Dec. 6 and Dec. 8 the three stocks fell 6.5%, 4.6% and 6.4%.

Charter Communications chairman and CEO Tom Rutledge spoke at the UBS conference on Dec. 8, and avoided making any specific broadband predictions. Rutledge did say that as the spike in pandemic-fueled consumer acceptance of the broadband product begins to unwind, there is still plenty of runway left. 

“I do think that the opportunity to grow the business is pretty much unchanged,” Rutledge said at the UBS conference. “If you look at it on a four- or five-year growth rate trend, it’s pretty solid, pretty straightforward and pretty consistent. I think that that future will look more like the trend than it will look like the third or fourth quarter.”

Cable operators have consistently denied that stepped up telco 5G wireless and fiber broadband initiatives would cut into their businesses, and at the UBS conference tried to stress that in addition to strong opportunities ahead for broadband, their other services are even more robust. Watson said at the conference that wireless subscriber additions should break records in Q4, and added that cable EBITDA growth should be between 7% and 8% in the period, exceeding analysts expectations.  

Watson said Comcast would add a record number of mobile customers in Q4, after signing on 285,000 additional Xfinity Mobile customers in Q3, its best quarterly performance since launching the wireless product in 2017. At the UBS conference, Watson said Comcast expects cable EBITDA growth to be in the 7% to 8% range in Q4, while net cash flow growth will be in the low double-digit percentages. 

“In wireless, we’ll  beat Q3 in Q4,” Watson said. “We’ll set a record.”

Rutledge didn’t make any wireless subscriber predictions, but said mobile service will be Charter’s biggest growth engine going forward, likening the mobile opportunity to that of the wireline telephone business several years ago. Back then, traditional phone companies were offering wireline phone service for $72 per month. Today, cable companies are selling wireline service for $13 per month and dominate the industry, with Comcast and Charter the two largest wireline phone companies in the U.S. 

“We took that business,” Rutledge said. “So, what kind of upside is there [to the mobile business]? That kind of upside.” ■ 

Liberty Latin America said it has completed its purchase of wireless and wireline assets in Puerto Rico and the U.S. Virgin Islands from AT&T on Oct. 31 in a deal valued at $1.95 billion.

Liberty Latin America first announced the deal in October 2019. Last month it said it had received approval from the U.S. Department of Justice for the transaction on the condition it divest of certain B2B assets in Puerto Rico.  

"By creating the leading integrated provider, we will deliver added value to customers through expanded product offerings, more resilient infrastructure, and world-class customer service levels,”  said Balan Nair, president and CEO of Liberty Latin America,  in a press release. “By completing this transaction, we continue to demonstrate our ability to execute on our disciplined inorganic growth strategy. We are excited about the opportunities ahead of us and are already working hard on our integration plan to drive value for our customers, our shareholders and our employees.”

Charter Communications chairman and CEO Tom Rutledge said the cable operator is moving toward a future where broadband speeds of up to 10 Gigabits per second are possible, but stopped short of pinpointing exactly when that future will be.

At the UBS Media and Communications conference in New York, Rutledge pointed to the cable operator’s current MVNO agreement with Verizon, which he said could take hold in late 2017 or 2018. But building on that deal – which would allow Charter to resell a Verizon wireless service under its own brand – would be an even faster wireline service that Rutledge said could open up a “whole new industry.”

Rutledge said there are already about 200 million wireless devices connected to Charter’s wireline network and about 80% of the bits on a mobile company’s network travel through that same network.

“We are a wireless company,” Rutledge said.

Charter has already exercised its Verizon MNVO rights, part of the SpectrumCo sale of wireless licenses to Verizon in 2011. Comcast also has said it exercised those rights.

Charter currently offers data speeds of up to 100 Megabits per second in most of its markets and its minimum speed is 60 Mbps. Other operators have offered 10 Gbps download speeds in select areas, and symmetrical 10 Gbps is part of the “Full Duplex” enhancement to the DOCSIS 3.1 standard. The spec for the Full Duplex extension is expected to be completed sometime in 2017. However, commercial deployment probably won't begin until 2018 or 2019.

At the UBS conference, Rutledge said MVNOs have their limitations, but with future technologies on the horizon like 5G wireless – he said Charter has applied for experimental licenses for testing that technology – the possibilities surrounding hybrid wireline and wireless networks are endless.

“I think we’ll begin to move toward building out a 10 Gigabit symmetrical infrastructure that is ubiquitously deployable across our footprint at fairly low capital investments relatively to anybody else,” Rutledge said. “…We can attach wireless devices to that high-capacity wireline network in a way I don’t think anybody else can do at the same level of capital efficiency and get tremendous throughput, low latency, high compute networks that bring the possibility down the road to a whole new industry essentially.”