NOVEMBER 16, 2023 / 11:20AM, CMCSA.OQ – Comcast Corp at Morgan Stanley TMT Conference
The 50% or so of our territory now will go to 60% in the next couple of years, and it probably won’t stop at 60%. It will go beyond that. But that’s very much a known quantity. We know how to compete. We know how they calculate returns. The newer entrant, if you will, has been fixed wireless. And that’s been in the market for a couple of years at this point. You’re seeing between mostly Verizon, T-Mobile, maybe to a lesser extent, AT&T, although they’re in the mix a little bit now, you’re seeing that category add about 1 million subs per quarter. And that’s been in place for the last several quarters. I would predict it’s probably going to continue to be in place for the next several quarters.
But that drives us to say, how do we compete in this environment? When we look at fixed wireless, it is taking share at the low end, for sure. And our priority managing a base of 32 million subscribers has been in an environment like this, where eking out the next 100,000 subscriber additions becomes more challenging. The best thing we can do is sort of manage rate and volume and get that balance right. And I credit the team, Dave Watson and his team, I think, have done a really nice job of that this year.
So, we’ve grown ARPU despite the competitive environment. Over the first 3 quarters, we’ve been right around 4% ARPU growth. So back to what does that mean? That means close to $1.2 billion in incremental revenue that comes into the system at very high margins. And if that’s how you’re managing the most competitive environment you’ve seen in a long time and that’s what you’re able to produce, that’s a good outcome while you position, hopefully, for what sits on the other side, which is fixed wireless sort of rationalizes. It will have a place in the market, but it’s a niche place, we believe. And hopefully, we’re in position to be on the other side of this where we can ramp up volumes again and have a volume story. But for now, we’ve got a very solid pricing story.
Benjamin Daniel Swinburne – Morgan Stanley, Research Division – MD
It’s been a little bit of a rollercoaster this year, certainly the last few quarters on the stock price reacting to some pretty small changes in the actual numbers. But in the second quarter, you guys had a — you outperformed expectations, you added customers, and I think there were some offers at the lower end, which you just touched on that may have helped.
It seems like you backed away from that in Q3. I’m sure investors and shareholders like small adds better than small losses. Why not continue some of those lower-end promotions to sort of drive some growth? How do you think about sort of — I know you just touched on it a little bit, but sort of the puts and takes around promotional activity.
Jason S. Armstrong – Comcast Corporation – CFO
Yes. Well, I think these are smaller changes on the edges. As you know, we don’t release what churn is in broadband. But if you’re in super rough terms, if there’s $2 million coming out, $2 million coming in, in a quarter, then small changes. When you’re talking about 20,000 subscribers against the base of 32 million, tough to be all that fine-tuned.
But we were — we are constantly trying to go, what I think Dave and team would say, as pulse offers into the market, right, and see how we can compete in certain segments, but with an eye towards are we changing the acquisition mix unfavorably or are we putting the base of 32 million customers at risk in terms of tiering down. And so it’s a constant balance. We’re going to constantly have offers in the market where we try to test that balance and see if we can compete without cannibalizing.
I think we’ve had different offers in the market over the first half of the year. By the way, we’ll have more offers that sort of look like that as we continue to test how we compete here. But most importantly, I think as you said and you’ve written in your research, we probably have the same view, protecting ARPU growth in an environment like this is, I think, priority #1, and we’ve delivered on that this year.
Benjamin Daniel Swinburne – Morgan Stanley, Research Division – MD
Is there anything you’d take from the success fixed wireless has had, which I think everyone in the market, buy side, sell side, et cetera, probably underestimated the impact that it would have in the marketplace. Anything that you, as a company, you guys take away from this as you plan the strategy over the next few years?
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