Cable One shed some light on its experience so far with the FCC's Emergency Broadband Benefit (EBB) program, finding that a big majority of enrollees are existing broadband customers who use that money to upgrade to faster speed tiers.
Cable One has about 5,000 customers enrolled in EBB so far. However, more than 75% of them have selected tiers offering downstream speeds of 200 Mbit/s or greater, while less than 10% are new customers to Cable One, CEO Julie Laulis said on the company's Q2 2021 earnings call Monday.
Laulis said the Cable One customers in the program that are existing broadband subscribers are upgrading to higher speed tiers at three times the rate of non-EBB customers.
Like other cable operators and ISPs, Cable One launched the EBB program in May. The program, which has enrolled more than 4 million US households so far, offers a temporary discount of $50 a month on eligible household Internet bills for the duration of the pandemic, and up to $75 a month for eligible households on tribal lands.
Broadband subscriber and ARPU gains
Cable One added 14,000 new residential broadband subs for Q2 2021, ahead of analyst expectations but well below the 45,000 gained in a year-ago period fueled by the early stages of the pandemic. Cable One's Q2 2020 broadband results were well above a gain of 1,200 subs in the comparable Q2 of pre-pandemic 2019.
Cable One's broadband average revenue per user (ARPU) remained tops in the industry, with speed tier upgrades and uptake of Cable One's unlimited data option (which costs an additional $40 per month) among the top drivers. Cable One's residential broadband ARPU of $78.34, up 6.2% year-over-year, was ahead of $75.34 at Altice USA, $65.19 for Comcast and $63.19 for Charter Communications, according to MoffettNathanson.
Cable One's video penetration of homes passed fell to 10.9%, versus 12.4% a year earlier, a number that reflects the company's focus on high-margin broadband service and its general de-emphasis of pay-TV. The operator's broadband penetration rose to 38.6%, a percentage that is still the lowest among its US cable operator peers.
"And with limited fiber-based competition, their ceiling is arguably the highest," Craig Moffett, analyst with MoffettNathanson, explained in a research note.
Laulis estimated that 24% of competitive providers offer speeds of at least 100 Mbit/s, and 14% of Cable One's footprint includes a fiber-to-the-premises service provider. But she said the company has been able to compete well against all types of technologies, whether it's DSL or fiber.
"We are winning share, not them," she said. "It doesn't matter what technology the competitor has."
Thus far, Cable One has not yet seen much in the way of competition from T-Mobile's fixed wireless home broadband service.
Laulis said some 78% of new Cable One broadband subs take downstream speeds of 200 Mbit/s or more, and sell-in for its 1-Gig service is nearly 15%.
Network usage among Cable One's residential customers clocked in at about 475 gigabytes per month. Laulis said plant utilization during peak periods dipped to 19% for the downstream, and ticked up slightly to 18% for the upstream, indicators that Cable One's investment in network upgrades and capacity have put the company in position to stay well ahead of the pandemic's data demands.
— Jeff Baumgartner, Senior Editor, Light Reading