Analysts See Cable’s Broadband Growth Slipping as Wireless Momentum Continues

MoffettNathanson joined the recent chorus of a steeper-than-anticipated slowdown in broadband subscriber growth for the second quarter of 2022, expecting large operators like Comcast and Charter Communications to report less than half the customer gains they did in the first quarter, while wireless customer additions are anticipated to maintain their recent upward momentum. After its purchase by SVB Financial Group, MoffettNathanson was required to reinitiate its coverage of the sector, and on July 12 it did just that. Of the nine cable and telecom stocks MoffettNathanson follows, four have an “outperform” rating: T-Mobile, Comcast, Charter and fixed-wireless access provider Starry. The rest — Altice USA, Cable One, AT&T, Verizon Communications and Dish Network — have a “market perform” rating. Several analysts have already modified their broadband subscriber growth forecasts for the bigger operators, with some expecting full-year 2022 additions to be nearly one-third of those of the peak year of 2020. Driving those modifications are the added pressure of increased fiber buildouts by telecom companies like AT&T and Verizon, aggressive pricing, the near disappearance of digital subscriber line customers — once a top feeding ground for cable broadband — and sluggish new household formation. MoffettNathanson senior analyst Craig Moffett estimated that both Comcast and Charter would report broadband growth of 91,000 and 90,000 in second quarter 2022, less than half the 262,000 and 185,000 they added, respectively in the first quarter.