Comcast shares closed down 7.3% Tuesday after company CFO Mike Cavanagh warned that subscriber growth in broadband, now considered the cornerstone of Comcast's cable business, is showing signs of slowing when compared to pre-pandemic levels.
"What we're seeing in the most recent past, like the tail end of August, is a little bit of a slowdown in the net adds in the cable business," Cavanagh said Tuesday at the Bank of America Media, Communications & Entertainment Conference.
He said Q3 2021 totals will likely fall behind Q3 2019, when Comcast added 379,000 broadband customers (359,000 residential and 20,000 business). However, Cavanagh stressed that Comcast still expects full-year 2021 total to surpass the 1.4 million broadband subs added in full-year 2019.
Comcast and other cable operators have been using 2019 subscriber metrics as the comparison for 2021 results. That's primarily because last year's explosive broadband subscriber totals were driven and disrupted by a pandemic that forced millions of people to school and work from home. During the pandemic-marked 2020, Comcast added 633,000 broadband subs in Q3, and a whopping 1.97 million broadband customers for the full year.
Sizing up 'mid-split' upstream upgrades
Comcast's network has been up to the task during the pandemic, but Cavanagh pointed out that the cable op will continue to invest in its network. Comcast currently offers up to 1.2 Gbit/s in the downstream on its widely deployed DOCSIS 3.1 network.
"We'll step on the gas a little bit … and continue to invest in the network on the path to DOCSIS 4.0, which will give us multi-Gig speeds up and down," Cavanagh said.
Cavanagh said Comcast is in the process of deploying a "mid-split" upgrade that would add spectrum and capacity to the DOCSIS network upstream, noting that this is now the new "base case" for Comcast. Executing a mid-split, which would expand the upstream spectrum to a range of 5MHz-85MHz, is not disruptive as it does not require new equipment in the home, and it puts Comcast on a path to DOCSIS 4.0, he explained.
For more about Cavanagh's talk at the BofA conference, including updates on Comcast's mobile business, its plans to deploy CBRS spectrum and its posture on potential M&A, please see this story at Light Reading.
— Jeff Baumgartner, Senior Editor, Light Reading