Why cable companies like Comcast and Charter are leaning into mobile service – CNBC
2025-04-23T13:15:01Z
Less than a decade after cable giants like Comcast and Charter jumped into the mobile business, the segment has become a significant financial driver.
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Cable companies are increasingly calling on mobile for their next big opportunity. The cable industry’s foray into wireless has long been considered a retention tool for the behemoth broadband business. Less than a decade after cable giants like Comcast and Charter Communications jumped into the mobile business, the segment has become a significant financial driver — and a priority when it comes to growth. “It’s not only a play for additional broadband customers, it’s a product that kind of generates financial returns in and of itself, and where we continue to grow really dramatically,” said Charter Communications Chief Financial Officer Jessica Fischer in a recent interview. Cable companies, once well known for offering pay TV bundles and landline phone service, are now burgeoning providers of home internet and, most recently, mobile phone services. Comcast provides its services under the Xfinity brand, while Charter’s products are under the Spectrum banner. These two companies, as well as smaller operators like Altice USA , have experienced consistent quarterly growth in mobile customers. Nearly half of all wireless line additions last year were from a cable operator, according to data from MoffettNathanson. This is the flipside of cable’s broadband business, which has been plagued by net customer stagnation and even losses, weighing down stock prices. Cable executives have pointed to intense competition, and it’s unclear if or when this trend will change. In response, Charter has centered offerings and bundles around mobile, and Comcast recently said it will follow suit. Customers have been attracted to cable wireless offerings in part due to much cheaper pricing, sometimes as much as hundreds of dollars less each year than traditional wireless plans. But the growth in mobile hasn’t yet equated to growth in the companies’ stock prices. Investors have largely shrugged at the strides made in mobile, likely due to the intense focus on broadband, industry executives and analysts told CNBC.
Media analyst Craig Moffett, co-founder of MoffettNathanson, said this dynamic reminds him of the 2009-2010 time period, when investors were focused on the decline of pay TV, once considered cable’s “core business,” and didn’t give broadband growth its due. “The threat to the broadband business today is nowhere near the threat of the [pay TV] business,” said Moffett. “[Pay TV] was facing an existential and secular decline, and now broadband is facing some competition. But no one is arguing that it’s going away.” He noted the mobile market is about double the size of the broadband market, so cable operators have a big opportunity in capitalizing on both. “There’s much more to gain, and much less to lose,” he said. Comcast Chief Financial Officer Jason Armstrong highlighted the company’s growth potential during an earnings call in January. “While we are the incumbent in the $80 billion U.S. residential broadband market, we are the challenger in the far larger $200 billion U.S. wireless market,” said Armstrong. “Wireless is an integral part of our broadband strategy.” Comcast and Charter report first-quarter earnings on Thursday and Friday, respectively.
Dialing up
Mobile has taken off for cable companies since being launched less than 10 years ago. Charter’s Spectrum Mobile lines have grown from 1.08 million in the fourth quarter of 2019 to 9.88 million in the fourth quarter of 2024. Over that same period, Comcast’s Xfinity Mobile lines increased from 2.05 million to 7.83 million, and Altice expanded its Optimum Mobile base from 69,000 to nearly 460,000. This pales, however, in comparison to Verizon, AT&T and T-Mobile , which each have more than 100 million wireless customers. These companies are also offering home broadband options now, including fiber-based broadband as well as 5G high-speed internet, which is becoming an increasingly popular alternative. Verizon touted its home internet growth during its earnings report this week. Conversely, cable companies have collectively lost over 1 million internet customers and 8.7 million cable customers in the past three years. Last year, Charter unveiled a series of changes, including aggressive pricing and packages that included mobile lines. Earlier this year, Comcast said it would shift its strategy to similar tactics to grow its mobile business even further. “We will lean into wireless more than ever before,” Comcast President Mike Cavanagh said during January’s earnings call with investors. This week, Comcast introduced a new Xfinity Mobile higher-end plan in a bid to attract more customers. The company also recently created the role of chief growth officer and hired media and tech veteran Jon Gieselman to focus on its Xfinity residential business.
For Charter and Comcast, mobile customer additions most often come from their existing base, rather than incoming customers. Customers of Altice USA’s Optimum mobile who bundle the service with other products like broadband and cable TV are more than 20% less likely to drop their service, according to Michael Parker, Optimum’s president of consumer services. An Optimum-commissioned survey published Tuesday highlights the bundling opportunity for cable companies. About 25% of Americans said they would likely subscribe to a bundle in the next year, and 80% believe bundling internet and mobile is more cost-effective than purchasing them separately. Altice USA’s mobile plans are offered to anyone in the company’s footprint, even if they don’t subscribe to other Altice services. This is the opposite of most other operators, which require you to be a customer in order to receive mobile. Altice has set a goal of 1 million mobile customers by the end of 2027. Mobile “wasn’t really intended at the outset to really drive meaningful business. But everyone figured out real quickly that it actually is a strong standalone business,” Parker said.
Going mainstream
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