Moody’s Raises Cable Outlook to ‘Positive’

Moody’s Investors Service raised its rating on the cable television sector to “positive” from “negative,” fueled mainly by expected growth in broadband. Moody’s expects cash flow in the sector to rise more than 5% over the next 12-to-18 months, based on the continued rise in broadband customers due to the pandemic. Moody’s noted that cable broadband subscribers grew by about 2.5% (3.5 million customers) in Q2, and market penetration rose to 50% in the period, compared to 48% in the prior year. This despite video and voice customer declines in the 4-6% range annually. Moody’s estimated that broadband is replacing video at a 1.9 times clip, rising to 2.2 times in Q2 for the first time in five quarters, a sign of future strength. Moody’s expects broadband subscribers to rise by at least 4% over the next 12-to-18 months, driven  by demand for greater capacity and speed. Video customer losses are expected to rise beyond 5% over the same period.