WOW! Lost 4,400 Broadband Subs in 3Q, Expects 4Q To Be ‘Significantly Worse’
By Ted Hearn
Washington, D.C., Nov. 8, 2023 – WideOpenWest (WOW) lost 4,400 broadband subscribers in the third quarter, with CEO Teresa Elder saying she expects fourth quarter loses to be ‘significantly worse’ because of stronger fixed wireless access (FWA) competition and slower customer growth in markets where the company is building new networks.
On a call with Wall Street analysts, Elder said the company could lose three times as many broadband subscribers in the fourth quarter as it did in the third – which could put the expected loss at about 13,000 customers. WOW had 503,400 broadband subscribers at the end of the third quarter.
“As a result of the pressures in the legacy markets and slower than expected new homes coming on board, our expectation is that the fourth quarter will be significantly worse than the third quarter,” Elder said. “Therefore, we are removing our outlook for the fourth quarter.”
She said the company – which raised broadband prices in July, leading to customer defections – will not take a rate increase in the fourth quarter.
In the third quarter, Verizon added 384,000 FWA customers while T-Mobile added 557,000 for a combined total of 6.8 million after just a few years in the market. FWA’s rapid growth is a likely cause of broadband subscriber losses for Comcast, Cable One and WOW in the third quarter.
“We are seeing fixed wireless begin to more aggressively compete for our customers at the lower speed tiers across several of our legacy markets,” Elder said.
Elder’s company hopes to pass 400,000 new broadband homes by 2027. It has already passed 25,000 homes so far, including 14,100 in central Florida alone. Because of construction delays, WOW is seeing the pace of the new passings fall behind internal projections, impeding the company’s ability to sign up new broadband customers to offset losses elsewhere.
Last May, WOW announced a partnership with YouTube TV with the goal of migrating all WOW cable TV customers to that streaming service. WOW reported having 100,800 video subscribers at the end of the quarter, down about 9,200 subscribers from the previous quarter.
Elder said that by shifting cable TV customers to YouTube TV, WOW can reclaim network capacity needed for the rollout of the new generation of broadband network technology called DOCSIS 4.0.
“We have not forced customers off of video to date,” Elder said, referring to cable TV service. “We know that over the next year, year-and-a-half we want to get completely off our QAM [quadrature amplitude modulation] network. So, at some point there will be that, but that’s not what were doing is forcing them off now.”
For the third quarter, WOW reported revenue declined slightly to $173.1 million and produced a net loss of $104.5 million driven by a $131.7 million non-cash impairment charge on intangible assets. High-speed data (HSD) revenue hit a record $109.8 million, an increase of $7.5 million, or 7%, compared to the third quarter of 2022. HSD ARPU (average revenue per user) hit a record $72.40, Elder said.
The company’s quarterly results included adjusted EBITDA of $70.9 million, an increase of $2.4 million, or 3%, compared to the third quarter of 2022.
WOW ended the third quarter with $889.1 in debt.