May 05, 2021
Mediacom Plots Broadband Expansion to 500K Locations
U.S. operator Mediacom revealed a plan to bring high-speed broadband to an additional 500,000 unserved and underserved homes and businesses over the next three years, after posting Q1 2021 results largely underpinned by double-digit broadband revenue growth.
A company representative told Fierce the expansion will include a combination of new builds fueled by state and federal broadband grants, line extensions and fixed wireless access (FWA) buildouts using recently purchased 3.5 GHz (CBRS) licenses.
However, the representative noted the Covid-19 pandemic has created “workforce and supply chain challenges” that could slow its expansion effort. Looming legislative and regulatory issues, including tax increases and Title II regulation, could also derail its plan, the representative added.
The representative declined to share capital spending plans associated with the expansion.
In December 2020, Mediacom won $2.25 million in funding from the Federal Communications Commission’s Rural Digital Opportunity Fund Phase I auction to build out to 9,752 locations in Alabama, Florida, Georgia and North Carolina. Funding is set to be distributed over a 10-year period. It is unclear whether this work is part of the aforementioned plan.
Mediacom is the fifth largest cable operator in the U.S., serving more than 1.4 million homes and businesses across 22 states. Though it was formerly publicly traded, founder and CEO Rocco Commisso took the company private in 2011. It still issues quarterly performance updates but does not host earnings calls with executives.
The company posted its Q1 2021 report on today, which showed double-digit revenue growth from its high-speed data (HSD) broadband service helped it overcome declines in its video, phone and advertising businesses.
HSD revenue increased nearly 16% year on year to $258.7 million, while business services revenue grew 6.5% to $75 million. Video revenue fell nearly 4% to $174 million, with phone sales dipping 3% to $28.8 million and advertising income declining 15.3% to $10.5 million. Consolidated revenue of $547.5 million was up nearly 6% year on year.
The company added 16,000 HSD customers in the quarter, down from 21,000 in the year-ago period, raising its total to 1.45 million. It lost 17,000 video customers and 12,000 phone customers.
In response to questions from Fierce, the representative said more than 20% of new broadband customers are taking its fastest level of service upon signup. Overall, more than 15% of its total broadband customers subscribe to gigabit services today.
The representative said it has added more than 10,000 customers to its low-cost broadband program over the last 12 months. The Federal Communications Commission’s Emergency Broadband Benefit program, which will offer a $50 per month subsidy for low-income consumers, “should help drive some new connects” in the coming quarters. However, the representative noted “given the large number of ISPs participating and the finite amount of money that is in the program, it is difficult to know with any certainty what the full impact will be.”