If there's one thing that the novel coronavirus has been good for, it's the broadband business.
Like take-out food, hand sanitizers, laptop cameras and toilet paper, broadband has taken off over the last couple of months as the COVID-19 pandemic has forced tens of millions of people to work, learn and play at home. As service provider after service provider has reported, broadband network traffic surged to record levels by early April and has pretty much remained there since then.
Now the coronavirus impact is starting to be evident in the broadband subscriber totals as well. Last week Comcast, Charter Communications and Altice USA, the three largest publicly traded cable operators in the US, all reported much stronger broadband subscriber gains in the first quarter than they enjoyed a year earlier. Further, at least one reported that the second quarter is also off to a strong start as the broadband surge continues.
Starting with Comcast, the No.1 US cableco said it netted 477,000 new broadband customers (including 466,000 residential subs) in Q1, up markedly from an increase of 375,000 subs in the same quarter a year earlier. The gain, which was Comcast's best quarterly result in the category in 12 years, boosted the MSO's residential broadband sub base to 26.9 million and its overall sub total to 29 million with business customers included. And the total does not include about 32,000 free Internet Essentials customers that Comcast also added in the quarter.
Speaking on last week's earnings call, Comcast Senior EVP and CFO Michael Cavanagh said the provider was also off to a "solid start" with broadband sub gains in April. Seeking to sustain the growth pace without having techs enter customers' homes, Comcast is using a new "drop and go" program to help fuel its self-install model.
Dave Watson, president and CEO of Comcast's cable unit, said some of the company's sub adds are still coming from people switching from DSL, customers who have never had broadband before and formerly mobile-only customers who now feel the need for a wired broadband service. "I think we've proven we can drive connects" during the pandemic, he said.
Comcast executives reported that they have seen a 33% surge in upstream traffic since the virus outbreak began. "Our network is operating incredibly well," Cavanagh said, noting that the MSO is conducting about 700,000 speed tests across its network each day.
The story was similar over at Charter, the nation's second largest MSO. In its Q1 earnings release last week, Charter reported that it signed up 563,000 residential broadband customers in the winter quarter, well above the 398,000 new subs it netted a year earlier, as it benefited from both an acceleration of self-installs and a surge in new customers attracted by temporary free offers. The increase boosted Charter's total broadband sub base to 25.5 million.
Speaking on his company's earnings call, Charter President and CEO Tom Rutledge said it moved "aggressively" to a customer self-installation model in the winter period. Whereas prior to the pandemic self-installs represented about 55% of Charter's overall sales, they now climbed past the 90% mark, slashing the company's installation costs substantially.
Charter also shed light on the impact of a COVID-19-driven offer to provide 60 days of free Internet service to students and educators who did not take service from the MSO before. About 119,000 of the quarter's total net broadband adds came through this program.
Rutledge noted that about half of those new subs signed up for additional products, such as video and phone, with immediate billing, while few opted for just Charter's low-income broadband product. He said Charter execs hope that this is a sign that customers coming in through the program will remain after the free broadband offer ends.
Continuing the trend, Altice USA also generated big broadband sub gains for the first quarter. The nation's fourth-largest MSO added 60,000 high-speed data customers in Q1, including 9,000 through its low-cost Altice Advantage program for qualified families and seniors. That's up from a gain of 37,000 broadband subs in the year-ago quarter.
Speaking on his company's earnings call last week, Altice USA CEO Dexter Goei said voluntary speed upgrades nearly doubled in March from the prior month. At the same time, the cableco has broadened the availability of 1-Gig speeds across both its Optimum (former Cablevision Systems) territory in the New York metro area and its more rural Suddenlink footprint. As a result, about half of its Optimum footprint now enjoys access to 1-Gig service while more than 75% of its homes can get it in the Suddenlink areas.
Goei said Altice USA has boosted its gross adds of 1-Gig customers by 56%, with the sell-in rate of that product now 13% in areas where the 1-Gig tier is offered. As of the end of March, the MSO's average downstream broadband speed per customer was 222 Mbit/s, about triple what it was three years earlier (70 Mbit/s). But about two-thirds of its broadband subs still opt for tiers of less than 200 Mbit/s, which Goei views as a significant upgrade opportunity.
Unlike Comcast and Charter, Altice USA has not placed much emphasis on self-installs since it was not a major priority before the pandemic. But company executives believe they will be able to keep up with demand for self-installs as that market emerges. Officials say they are probably another year away from having that program up and running in a big way for their DOCSIS and FTTP products.
For more on the three MSOs' Q1 results, please turn to our sister site, Light Reading.
Charter nets big broadband gains in Q1 as self-installs accelerate
Altice USA touts broadband sub surge in Q1
Comcast sees broadband and mobile gains but greater video pain in Q1
Broadband usage surged 47% in Q1 to 402.5 GB per user – OpenVault
— Alan Breznick, Cable/Video Practice Leader, Light Reading