The major pay TV operators will report collective losses of around 510,000 customers for the first quarter, a “slight deterioration” relative to the 412,000 lost in the first quarter of 2017, Maquarie analyst Amy Yong predicted.
“Competition is creeping on all fronts,” Yong wrote, noting the growth of Netflix, Amazon and Hulu. She predicted Q1 pay TV losses of 77,000 for Comcast, 20,000 for Charter, 52,000 for Altice USA and 198,000 for AT&T.
Verizon already reported earlier today that it lost 22,000 Fios TV users in the first quarter.
Yong also predicted growth of wireline broadband customers to collectively come in at 820,000, compared to 1 million in Q1 2017. Comcast, she forecasts, will aded 367,000 users, with Charter (362,000), Altice (19,000) and AT&T (114,000) adding users, as well.
More specifically, Long called this week a “make or break” one for the cable industry in terms of investor sentiment, with the threats of wireline broadband saturation, cord cutting and emerging competition from 5G networks coalescing, as Comcast and Charter get ready to report first-quarter earnings.
“Broadband competition is picking up,” Long noted. “AT&T is rolling out FTTP and will likely reach ~14m by Jul. ’19; the carrier is pushing video-broadband bundles starting at $65 a month for the first year plus a $250 Visa card. Verizon is rolling out fixed wireless 1Gbps+ speeds in 3-5 cities by the second half of 2018 with an initial opportunity of 3 million homes.”
“On the positive side,” Yong added, Comcast and Charter’s 50-50 partnership on mobile back office technology development decreases the likelihood of an outright purchase of T-Mobile or Sprint.
“On the negative side, MVNOs are not a viable long-term strategy,” she added.