Comcast is moving forward with its migration to DOCSIS 4.0 and plans to expand broadband to more locations this year despite seeing a dip in broadband subscribers during the second quarter.
Jason Armstrong, CFO of Comcast, said the provider had deployed mid-splits to more of its customer base and is on track to have them deployed to one-third of its base by year-end. Mid splits are an upgrade that enables customers to use 1.2 GHz of spectrum within the coaxial portion of the link, with a more significant part of the range dedicated to the upstream path compared with earlier methods.
“We are more than halfway through the year and have implemented mid-split technology at 25% of our footprint and are on target to complete one-third of this build by year-end, with the first commercial launch of DOCSIS 4.0 in just a few short months,” he said.
The cable MSO’s movement to DOCSIS 4.0 comes as it moves forward with plans to bring service to new locations. “We've grown our homes and businesses past by 1.5% year-over-year to 61.8 million, and we are on pace to meet or exceed our goal of 1 million new homes and businesses past for 2023, with future footprint expansion remaining a high priority,” Armstrong said.
All of this is coming as Comcast lost 19,000 broadband subscribers. However, David Watson, president, and CEO of Comcast Cable, said more customers are taking 400 Mbps speed tiers and above. “We are focused on the starting point of high-end broadband activity in tiers,” he said. A third of our customers-plus are on one gig, and we've launched our new 2-gig service to 25% of our footprint, and overall, 75% of our customers or for 100 megabits or more.”
Eying rural opportunities
Like its cable MSO brother Charter, Comcast is no less interested in pursuing new government funding to deepen its network reach.
Watson said Comcast operates in 39 states and is engaged with federal and state government agencies to develop funding plans. “As the framework rules of bid participation are being developed, we are actively looking at it and working in a good way at all levels,” he said. “So, assuming satisfactory outcomes on the framework roles, we will be full participants in bidding where it is consistent with our business goals.”
One of the big questions is the $42.5 billion Broadband Equity, Access, and Deployment (BEAD) program funding program for rural areas. Although Comcast did not participate in the FCC’s Rural Broadband Opportunity Fund (RDOF) auction, it is actively pursuing state and local rural broadband subsidy programs, including BEAD.
Watson said that while "it’s early in the process for us to comment on where we'll bid or the potential win rate, we're actively building out” the network “where there’s a profitable return and aggressively pursuing it.”
He emphasized that “we are going to build out even before any bidding activity, and the bid activity is going to be more rules will come out and be clarified.”
Comcast plans to continue leveraging mobile services across its subscriber base to improve its broadband ARPU. The cable MSO will continue to work with new broadband partners to carry critical applications like Peacock.
“We're going to continue to leverage mobile, and we're going to press aggressively with mobile, and even new broadband partners, like NOW TV, which is a great streaming video tier that showcases Peacock,” Watson said. “And the net of this is a stable base, 32 million residential broadband customers, and while protecting residential broadband ARPU growth.”
Given the size of its base, Comcast plans to bundle wireless with broadband. “We'll continue to be opportunistic throughout the year,” Watson said. “We will aggressively package mobile with broadband for new and existing customers.”
He added, "This is an opportunity to grow the mobile business and help broadband.”
Armstrong noted that the growth in domestic wireless revenue was due to higher service revenue. This was driven by customer line momentum, up $1.4 million or 30% year-over-year, to $6 million in total, including the 316,000 lines it added in the quarter. “This marked the seventh consecutive quarter of more than 300,000-line additions,” he said.
Armstong added that Comcast is testing with new converged offerings and sees new growth potential for wireless. “We will continue to experiment with different offers over time,” he said. “With just 10% of our domestic residential broadband customers taking our mobile offering, we have a big opportunity and long runway ahead for growth in wireless.”