New Street Research: Cable's Q2 broadband tally might buck seasonal trends

The second quarter (Q2) of the year is usually a tough stretch for cable operators. They typically see weak subscriber results because of "seasonality" – from students and snowbirds who shut off cable services as they return home for the summer. Cable broadband numbers in Q2 2023 aren't expected to be strong, but they may not be as weak as in recent years – at least for Comcast and Charter Communications, according to the latest expectations for the quarter from New Street Research. Comcast and Charter normally see a decline in broadband subscriber net adds of about 200,000 from Q1 to Q2 of the year. And before the pandemic, they would typically see a drop from around 400,000 to 200,000, New Street's Jonathan Chaplin explained. If "normal seasonality" holds, Charter would be expected to lose about 120,000 subscribers in Q2 2023 versus Q1 results, with Comcast losing about 190,000. However, the current consensus of Wall Street analysts expects Charter to add 16,000 broadband subscribers, with Comcast losing around 76,000. But if Charter and Comcast see improvements in market share trends, Chaplin believes different drivers are leading the way for each operator. For Charter, its new buildouts in rural areas could be on the rise – from about 17,000 subscribers in Q1 2023 to 24,000 in Q2. At Comcast, Chaplin wonders if the company is seeing momentum from a $25 per month lower-end offer aimed at fixed wireless access (FWA) competition, along with some pull-through effect from Comcast's relatively new convergence packages that share similarities with Charter's Spectrum One. In the bigger picture, Chaplin expects some factors to drive sustained improvements in US cable subscriber growth – slowing FWA subscriber growth and improving competitive positioning fueled by network expansions, convergence bundles and new tiers that size up against FWA speeds and pricing.