The Industry

Broadband Customers 2Q 2023

Leichtman Research Group recently released broadband customer statistics for the end of the second quarter of 2023 for the largest cable and telephone companies. Leichtman compiles most of these numbers from the statistics provided to stockholders other than for Cox and Mediacom, which are estimated, and now reported together. Leichtman says this group of companies represents 96% of all US landline broadband customers.

The first quarter of the year shows a continuation of the trend where all of the growth in broadband is coming from T-Mobile and Verizon FWA fixed cellular wireless. Those two companies added 903,000 customers, while the rest of the ISPs collectively lost over 52,000 customers.

2Q 2023 1Q 2023 1Q Change % Change
Comcast 32,305,000 32,324,000 (19,000) -0.1%
Charter 30,586,000 30,509,000 77,000 0.3%
AT&T 15,304,000 15,345,000 (41,000) -0.3%
Verizon 7,562,000 7,528,000 34,000 0.5%
Cox & Mediacom 7,035,000 7,035,000 0 0.0%
Altice 4,576,100 4,612,700 (36,600) -0.8%
T-Mobile FWA 3,678,000 3,169,000 509,000 16.1%
Lumen 2,909,000 2,981,000 (72,000) -2.4%
Frontier 2,865,000 2,863,000 2,000 0.1%
Verizon FWA 2,260,000 1,866,000 394,000 21.1%
Windstream 1,175,000 1,175,000 0 0.0%
Cable ONE 1,057,900 1,063,000 (5,100) -0.5%
Breezeline 680,785 687,519 (6,734) -1.0%
TDS 523,600 515,400 8,200 1.6%
Consolidated 376,829 369,862 6,967 1.9%
Total 112,894,214 112,043,481 850,733 0.8%
Cable 76,240,785 76,231,219 9,566 0.0%
Telco 30,715,429 30,777,262 (61,833) -0.2%
FWA 5,938,000 5,035,000 903,000 17.9%

The telcos collectively lost almost 62,000 customers in the quarter despite gains from Verizon FiOS, TDS, and Consolidated of 49,000 customers for the quarter. The biggest loser was Lumen, losing 72,000 broadband customers.

The only cable company with positive growth was Charter – its strategy of expanding its footprint into rural areas is clearly paying off.

It’s hard to see from these numbers where the huge growth of FWA wireless broadband is coming from. Much of the FWA growth is coming in rural markets where the competition is fixed wireless and satellite service. But FWA pricing seems to be aimed squarely at competing with DSL and probably counts for the overall losses for AT&T and Lumen. Both companies are adding fiber customers and are losing DSL customers more quickly than indicated by the overall numbers. I’m sure AT&T hates the loss of DSL revenue, but competition from FWA makes it that much easier for the company to eventually walk away from rural copper.



2022 Was a Year of Change for the Big ISPs

There was a sea change among the big ISPs in 2022. The big news is that most of the growth in the industry came from the T-Mobile and Verizon cellular FWA broadband product. Cable company growth crawled to a halt after a robust 2021, and the sector only grew by 55,000 net broadband customers in the fourth quarter. The big telcos still had small losses for the year, but the big news is that they added 2.4 million customers to fiber during the year.

The following list of ISPs represents about 95% of the U.S. broadband market. The large ISPs, in aggregate, added just over 3.5 million net customers in 2022. The two cellular FWA companies added 3,171,000 of those additions. Cable companies added 517,103 customers for the year, with most of the growth coming at the beginning of the year. The big telcos had a net loss of 181,276 customers but continued to furiously replace DSL with fiber.

The following statistics were compiled by the Leichtman Research Group, which tracks the broadband performance of the largest ISPs in the country. Following are the customers counts for the fourth quarter and the end of year 2022:

% 4Q Annual
4Q 2022 4Q Change Change Change
Comcast 32,151,000 (26,000) -0.1% 250,000
Charter 30,433,000 105,000 0.3% 344,000
AT&T 15,386,000 (66,000) -0.4% (118,000)
Verizon 7,484,000 37,000 0.5% 119,000
Cox 5,560,000 0 0.0% 30,000
Altice 4,282,900 (7,700) -0.2% (103,300)
Lumen 3,037,000 (63,250) -2.0% (253,000)
Frontier 2,839,000 8,000 0.3% 40,000
T-Mobile FWA 2,646,000 524,000 24.7% 2,000,000
Mediacom 1,468,000 0 0.0% 5,000
Verizon FWA 1,452,000 389,000 36.6% 1,171,000
Windstream 1,175,000 0 0.0% 10,300
Cable ONE 1,060,400 (1,600) -0.2% 14,400
Breezeline 693,781 (14,173) -2.0% (22,997)
TDS 510,000 3,500 0.7% 19,700
Consolidated 367,458 (14,454) -3.8% 724
Total 110,545,539 873,323 0.8% 3,506,827
Cable 75,649,081 55,527 0.1% 517,103
Telco 30,798,458 (95,204) -0.3% (181,276)
FWA 4,098,000 913,000 28.7% 3,171,000

There are a lot of interesting trends withing these numbers:

  • T-Mobile is now the 9th largest ISP, and the Verizon FWA product comes in at eleventh. T-Mobile is poised to pass Frontier and Lumen soon at the current growth rate.
  • While all of the landline ISPs on the list are feeling pressure from the cellular FWA product, the bigger and more permanent challenge for the cable companies is the 2.4 million telco customers added to fiber to the year. That statistic shows why cable companies are scrambling to improve upload speeds.
  • The biggest loser on the list continues to be Lumen, which lost 7.7% of its broadband customers for the year. It’s worth noting that the above numbers represent the smaller Lumen after the spinoff of Brightspeed in 2022. Breezeline (Formerly Atlantic Broadband) was the biggest percentage loser among cable companies, having lost 3.3% of broadband customers during the year.
  • TDS continues to be the fastest-growing landline ISP at 4.0% growth for the year. Next is Verizon FiOS, having grown by 1.6% for the year.
The Industry

Is Broadband Growth Slowing – 2Q 2019?

Leichtman Research Group recently released the broadband customer statistics for the second quarter of 2019 for the largest cable and telephone companies. Leichtman added Atlantic Broadband and TDS to their tracking list for the first time – both companies now have more customers than Cincinnati Bell, the smallest company on the list. Leichtman compiles these numbers from the statistics provided to stockholders. The numbers are lower than broadband customers counted at the FCC, and I think that most of the difference is to due to the way many of these companies count broadband to apartment buildings. If they provide a gigabit pipe to serve an apartment building they count that as 1 customer, whereas the FCC is likely counting the number of apartment units served.

2Q 2019 Added % Change
Comcast 27,807,000 209,000 0.8%
Charter 25,945,000 258,000 1.0%
AT&T 15,698,000 (39,000) -0.2%
Verizon 6,968,000 (5,000) -0.1%
Cox 5,120,000 20,000 0.4%
CenturyLink 4,750,000 (56,000) -1.2%
Altice 4,168,100 13,100 0.3%
Frontier 3,626,000 (71,000) -1.9%
Mediacom 1,303,000 15,000 1.2%
Windstream 1,034,300 1,900 0.2%
Consolidated 783,008 2,288 0.3%
WOW 765,500 (400) -0.1%
Cable ONE 681,762 3,377 0.5%
Atlantic Broadband 443,696 14,134 3.3%
TDS 433,400 5,800 1.4%
Cincinnati Bell 425,500 (1,200) -0.3%
Total 99,952,266 369,999 0.4%

Currently, these companies are seeing a composite annual rate of growth of broadband customers of 1.6% annually. These largest ISPs will surpass 100 million customers during this current quarter. Leichtman notes that these sixteen companies have added 13.5 million broadband customers over the last five years and 28.9 million over the last ten years.

These numbers raise the question if we are finally starting to see overall growth in the broadband market slow down. Consider the comparison of the second quarter of 2018 and 2019 annualized:

‘                                        2018                 2019

Cable Companies        2,987,721        2,128,844

Telcos                           ( 472,124)        ( 648,848)

Annualized Total         2,425,597        1,479,996

According to the FCC, over 85% of homes now have a broadband connection. Adjusting that statistics for rural homes that can’t get broadband, the penetration rate everywhere else is over 90%.

The growth of broadband customers added by cable company customers is slowing, with Comcast and Charter continue to be the only companies adding significant quantities of customers (over 200,000 each for the quarter).

Loss of telco broadband customers has increased over last year, mostly due to Frontier and CenturyLink losing DSL customers.

There are significant implications for cable companies if broadband growth stagnates because cable stock prices have been fueled by revenue growth driven by new broadband customers. As the number of broadband customers levels off, many industry analysts expect the companies to begin regularly raising broadband rates to meet Wall Street earnings expectations. We’ve seen the first signs of broadband rate increases over the last year, and the above slowdown is bound to rachet up the pressure on the cable companies.

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