Comcast, Charters are leaning towards mobile services

Cable companies are increasingly calling mobile for the next big opportunity.

The cable industry’s foray into wireless has long been seen as a holding tool for the Giants’ broadband business. Within ten years like the Cable Giants Comcast and Charter Communication Diving into the mobile business, the segment has become a key financial driver and a priority when it comes to growth.

“It’s not only a play for additional broadband customers, but it’s a product that generates financial returns in itself and continues to grow dramatically,” Jessica Fisher, Chief Financial Officer at Charter Communications, said in a recent interview.

Cable companies were once known for offering paid TV bundles and landline services, but are now the fastest growing provider of home internet and, more recently, mobile phone services. Comcast serves under the Xfinity brand, and Charter products are located under Spectrum Banner.

These two companies and small operators Altice USAhas experienced consistent quarterly growth in mobile customers. According to data from Moffettnathanson, nearly half of all wireless lines’ additions last year came from cable operators.

This is behind the cable broadband business, suffering from stagnation and losses in net customers, and is below the stock price. Cable executives point to fierce competition, and it is unclear when this trend will change. In response, the charter focuses on mobile-centric products and bundles, and Comcast recently said it will follow suit.

Customers are attracted to cable wireless products because they are hundreds of dollars less each year than traditional wireless plans due to cheaper pricing.

However, mobile growth is not yet equal to corporate stock growth.

Investors are shrugging on what has been made on mobile, as their focus is on broadband, industry executives and analysts told CNBC.

Media analyst Craig Moffett, co-founder of Moffettnathanson, said the dynamics reminded us of the 2009-2010 period when investors were once considered cable “core business” and did not postpone broadband growth.

“The threat to the broadband business today is not nearly as threat to the (Pay TV) business,” Moffett said. “While (Pay TV) was facing existential, secular decline, broadband now faces some competition. But no one claims it’s gone.”

He pointed out that the mobile market is about twice the size of the broadband market, so cable operators have a great opportunity to take advantage of both.

“There’s a lot more to gain and far less to lose,” he said.

Jason Armstrong, Chief Financial Officer of Comcast, highlighted the company’s growth potential during its revenue call in January.

“We are incumbents of the $80 billion US residential broadband market, but we are challengers of the much more US wireless market with a $200 billion,” Armstrong said. “Wireless is an integral part of our broadband strategy.”

Comcast and Charter report first quarter revenues on Thursday and Friday, respectively.

Since its launch within 10 years, Mobile has taken off for the cable company.

The charter’s spectrum mobile line increased from 108 million in the fourth quarter of 2019 to 988 million in the fourth quarter of 2024. During that same period, Comcast’s Xfinity mobile line increased from 205 million to 783 million, while Altice expanded its optimal mobile base from 69,000 to around 460,000.

However, this is different verizon, AT&T and T-Mobileeach has over 100 million wireless customers. These companies also offer home broadband options, such as fiber-based broadband and 5G high-speed internet. This is becoming an increasingly popular alternative. Verizon touted the growth of home internet in its revenue report this week.

Conversely, cable companies collectively lose more than 1 million internet customers and 8.7 million cable customers over the past three years.

Last year, Charter announced a series of changes, including aggressive pricing and packaging that includes mobile lines. Earlier this year, Comcast said it would move its strategy to similar tactics to further grow its mobile business.

“We’re more wireless than ever,” Comcast President Mike Cavanagh said in January’s call for revenue with investors.

This week, Comcast introduced a new Xfinity mobile high-end plan to attract more customers. The company recently created the role of Chief Growth Officer, hiring media and tech veteran John Gieselmann to focus on Xfinity Residential Business.

For charters and comcasts, the addition of mobile customers is often from existing bases rather than incoming customers.

According to Michael Parker, Optimum’s consumer services president, Altice USA’s Optimum Mobile customers, which bundles other products and services such as Broadband and Cable TV, are more than 20% less likely to drop their services.

The optimal commissioned investigation published Tuesday highlighted the cable company’s bondage opportunities. Approximately 25% of Americans say they are more likely to subscribe to the bundle next year, while 80% believe that internet and mobile bundling is more cost-effective than buying them individually.

Altice USA mobile plans are available to anyone in your company footprint, even if you don’t subscribe to other Altice services. This is the opposite of most other operators who need to become customers to receive mobile.

Altice has set a target for 1 million mobile customers by the end of 2027.

Mobile “We didn’t really intend to actually drive a meaningful business, but everyone quickly realized that it was actually a strong standalone business,” Parker said.

Other segments of the mobile and cable business work somewhat in symbiosis.

According to Brandon Nispel, an analyst at KeyBanc Capital Markets, the broadband segment, partially subsidizes mobile. Additionally, bundles containing mobile can appeal to current or prospective broadband customers.

However, cable companies still face specific challenges in brand awareness for mobile products.

In addition to being a new participant in mobile, brands are often most recognized by brands in the footsteps of cable companies. That means, in some respects, a rather silent and addressable market. But as businesses expanded their marketing for mobile services, intake has improved, executives say.

Altice’s mobile line rose 42.6% year-on-year in the fourth quarter. This was due to both product composition and marketing.

Rich Digeronimo, president of Charter’s products and technology, said more people are catching up to Spectrum’s mobile business.

“I think Spectrum Mobile’s brand recognition exists now,” Digeronimo said. “I think we’re way more mainstream than before.”

Most of the marketing magic is affordable.

Cable operators can extend their much cheaper offers with contracts that allow them to use their existing wireless networks.

Charter and Comcast use Verizon’s network, while Altice has agreed with T-Mobile. Because cable operators don’t own and maintain a network, these agreements allow them to offer mobile plans at a much lower rate than network providers.

Executives point out that much of the overwhelming amount of customer traffic exceeds Wi-Fi rather than wireless networks.

“Frankly speaking, I think it’s wireless for us given the cost of acquisitions and the benefits of off-roading to Wi-Fi.

For wireless companies, even if they lose a customer to a cable company, they still have a silver lining. Customers are still on Verizon’s network, so they’ll be reduced from cable operators. Industry executives say the deal is mutually appealing.

Communications leaders acknowledge that cable partners are increasingly invading their territory, but none of them express any concern. For one thing, it’s not easy to have someone drop a wireless plan.

“If cables want to be offensive, if they want to hand out free lines, that’s certainly their privilege,” Verizon’s Chief Financial Officer Tony Skiadas said at an investor meeting in March. “But whether they charge it or not, they still have to pay for us, Verizon, freeline.

AT&T CEO John Stankey said at a recent investor meeting that cable operators are taking part in the field as they compete against the company’s broadband products. He said AT&T has better products and is improving its cost structure and highly rated services.

“Because of their credibility, they spent decades over decades,” Stankey said, referring to the cable company. “We want to make this our 10 years.”

Disclosure: Comcast owns NBCuniversal, the parent company of CNBC.