Cable MVNOs keep shining
Comcast and Charter last week announced the results of their Q1 2021 operations. Both cable MVNOs continued to ride the momentum they have been enjoying for the past several quarters, and end the year with a cumulative 578K new mobile subscribers, slightly up from 560K new additions recorded in the previous quarter. Comcast added 275K new mobile customers to surpass the 3 million milestone since its establishment in 2017. Xfinity Mobile’s quarterly mobile revenues grew by 50% YoY, and Q1 2021 marked the first period the MVNO business’ operations reached a breakeven point since debut. Charter’s Spectrum Mobile, on the other hand, added another 285K new customers on top of the 315K mobile lines added in the previous quarter. Spectrum Mobile’s quarterly revenues increased by a whopping 91% YoY thanks to growing service and device-related revenues.
The NPD Take:
- This has been a memorable quarter for Comcast as it surpassed the 3 million subscriber mark, while breaking even in operations for the first time since launch. However, it should be noted that the breakeven financials came at a time when Xfinity Mobile took its feet off the subsidy pedal. The MVNO’s newly-launched unlimited plan pricing may also increase its wholesale data costs compared to the Pay-by-the-Gig model.
- Spectrum Mobile’s 300K new subscriber additions is a remarkable success, but it should be noted that the MVNO saw its operating costs increase by over 50% YoY, hence the red bottomline. Nevertheless, Spectrum Mobile’s almost doubling mobile service revenues will likely help the bottomline turn positive in the coming quarters unless it goes ultra aggressive with device subsidies.
Boost Mobile’s struggles continue
Dish Network last week announced that its Boost Mobile operation lost another 161K subscribers (on top of the 573K subscribers churned in the previous two quarters) to end the year with 8.9 million subscribers. The MVNO reported a quarterly churn of 4.4%, which is lower than the previous quarter’s 4.8% churn. Boost Mobile runs its operations as a wholesale MVNO on the T-Mobile network and is on the hook (enforced by the FCC) to deploy a wireless network covering 20% of the U.S. population by June 2022 and 70% of the population by June 2023. The MVNO was previously hit by T-Mobile’s recent announcement that it will shut down Sprint’s legacy CDMA network on January 1, 2022. Customers using older LTE/CDMA phones will lose connection when out of an LTE zone once T-Mobile pulls the plug on the Sprint CDMA network).
The NPD Take:
- Dish’s Q1 2021 churn might be slightly lower than the churn rate recorded in the previous quarter but it is still higher than all of its main rivals (including Tracfone, whose churn improved from 3.7% to 3.2 YoY in Q1 2021) and it is recorded at a time when the pandemic drove postpaid and prepaid churn levels to all-time low levels.
- T-Mobile’s plan to close the Sprint legacy CDMA network will have significant implications on Boost Mobile’s bottom line as the MVNO will have to force these users into a device upgrade that it will have to finance. Moreover, this upgrade cycle will give Boost Mobile’s rivals a genuine opportunity to target these upgraders with aggressive switcher promotions.