Comcast Forecasts Continued Customer Declines Amid Affordable Connectivity Program End

WASHINGTON, April 25, 2024 – Comcast Corporation executives indicated Thursday that they anticipate continued declines in their customer bases for broadband, cable TV, and wireline voice services through the second quarter in part due to the termination of the Affordable Connectivity Program. 

The media and technology conglomerate is urging Congress and the White House to renew funding for the program, which offers a $30 monthly discount on broadband bills for eligible low-income households. Full funding from the program is available only through April, with partial funding extending into May.

Comcast executives reiterated on a quarterly earnings conference call Thursday their commitment to assisting this customer segment in staying connected through the company's Internet Essentials program and the recently-introduced prepaid mobile plans, offered with no credit checks and no contracts.

As they manage the ACP transition, they also said they expect to continue to drive revenue growth within the broadband sector by implementing ongoing rate increases, which they anticipate will stay within the historic range of increases by three to four percent from quarter-to-quarter. 

As such, despite experiencing a loss of 65,000 broadband retail and business customers in the first quarter that ended March 31, Comcast managed to sustain revenue from domestic broadband by implementing said increases. Domestic broadband revenues grew on a year-over-year basis by 3.9 percent in constant currency to $6.6 billion in the quarter, on the strength of an increase in the average rate per customer of 4.2 percent. 

After observing a drop of 34,000 wireline broadband customers in the third quarter of 2023, representatives remarked that they do not foresee an immediate improvement in the trend of declining cable internet subscribers and expect turnover to rise throughout the second quarter due to the ACP’s end.

“It's a competitive market, especially in the price-driven segment, but we will continue to compete aggressively.”

Looking ahead, representatives said Thursday that they are focusing on the development of 5G wireless service.

During the call, representatives noted the expansion of its Xfinity Mobile service, which was credited with reducing customer turnover in that segment of the business. The company added 289,000 wireless lines during the quarter. The subscription base for Xfinity Mobile now stands at 7 million lines.

The company’s domestic cable TV customer base declined by 487,000 subscribers in the quarter, less than the 614,000 it lost in the comparable period last year. The total video base at quarter-end sat at 13.6 million. The 6.9 percent decrease in video revenue can be attributed to cord-cutting, as customers opt to cancel traditional cable TV subscriptions in favor of streaming services or other alternatives.

Despite reporting customer declines in broadband, cable TV and wireline voice services, Comcast saw its revenue increase by 1.2 percent to $30 billion, slightly surpassing analyst projections of $29.81 billion. The company's adjusted net income was flat at $3.8 billion compared to the comparable period.

Comcast's Peacock streaming service experienced a 55 percent surge in paid subscribers, generating $1.1 billion in revenue. This growth was fueled by strategic content additions like the Oscar-winning film Oppenheimer, it said. 

The company foresees that airing the 2025 Summer Olympic Games on its NBCUniversal platform, along with the return of NFL Big 10 games, will help preserve its position in the content domain as it transitions into the digital era.

Comcast also experienced revenue growth driven by its entertainment and content offerings through subsidiaries like DreamWorks Animation.

The company’s ongoing investments in theme parks, both international and domestic, also helped bolster revenue gains. Comcast continues to expand these offerings, currently constructing the new Epic Universe theme park in Orlando, slated to open in 2025.