US broadband customer growth stalls in Q1

New customer sign-ups in the US broadband industry slowed down dramatically in the first quarter of this year, according to a pair of analyst groups. But they're not sure why it happened. "It remains fairly clear that macro/competitive pressures are high, subscriber growth should remain negative for most, and ACP will be disruptive," wrote the financial analysts with KeyBanc Capital Markets in a note to investors Wednesday, pointing to the expected end of the US government's Affordable Connectivity Program (ACP). The financial analysts at New Street Research agreed. "Our preliminary forecast for 1Q24 has [customer] adds well below the prior year and the pre-pandemic period," they wrote in their own note to investors Thursday. "Is this a dip, following a few years of faster than normal growth? Is this excess growth enabled by ACP evaporating?" wondered the New Street analysts. "Essentially, is this a temporary slowdown, the new normal, or will growth slow further?" the New Street analysts continued. "We don't know the answer to this yet, though we believe the market has years of growth above the pace of household formation ahead. Broadband penetration is currently at 87%, and we forecast it getting to over 90% eventually."