Analyst Asks If Cable Is a Good Business and the Answer Doesn’t Mention TV

Top cable industry analyst Craig Moffett issued a report with a provocative title, asking, “Is cable a good business?” Clearly, MoffettNathanson’s principal and senior analyst believes Wall Street doesn’t think so. The future of the cable business lies in how much it will cost to upgrade broadband service, whether that expands the customer base, and how much revenue each customer generates. Moffett points out that when Charter Communications announced its capital spending plans, all of the major publicly traded cable stocks fell, even though Charter’s news was that its spending would be less than Wall Street had expected. Investors are also concerned about the threat that fixed wireless presents to cable broadband, Moffett said. Longer term, the bigger threat to cable broadband is likely fiber rather than fixed wireless. But even with that, the analyst seems to be less concerned that cable operators will overspend on fiber or that overbuilders will present more competition.