Earnings
In Q1, ‘we exceeding our expectations’ and are making substantial improvements in stabilizing subscribers, said WOW! CEO Teresa Elder.
WASHINGTON, May 7, 2024 – If broadband Internet Service Providers need some guidance on stemming subscriber losses, perhaps they should look at the turnaround taking place at WideOpenWest (WOW!).
WOW! reported first quarter results Tuesday that showed the company has made substantial progress in preventing broadband subscribers from defecting to wireline competitors like Comcast and Charter and fixed wireless access service providers like T-Mobile and Verizon.
In the quarter ended March 31, WOW! said it lost just 400 broadband subscribers, compared to a loss of 13,300 in last year’s fourth quarter and 4,400 in last year’s third quarter. WOW! ended the quarter with 489,700 broadband subscribers, a decrease of 19,000, or 4%, compared to March 31, 2023.
WOW! CEO Teresa Elder attributed the progress to several recent moves, including increasing tier speeds at no charge, simple pricing plans, no additional modem charge, no data caps, and no contracts. FWA providers have used the absence of contracts and data caps as a potent marketing tool against the competition.
“I’m pleased with the progress we made during the first quarter with respect to our subscriber numbers, exceeding our expectations and making substantial improvements in stabilizing the reduction in (high-speed data) subscribers,” Elder said on a call with Wall Street analysts. “The improvement reflects the ongoing success of the measures we launched during the quarter, including increasing our minimum speeds for existing customers to 300 Mbps as well as increasing the 500 Mbps customers to 600 Mbps.”
Despite progress in the first quarter, WOW! Chief Financial Officer John Rego said the company expects to lose between 500 and 2,000 broadband subscribers in the second quarter because Congress failed to extend the Affordable Connectivity Program (ACP), the broadband subsidy program for low-income households.
“The ending of the ACP program is causing some uncertainty this quarter and is being reflected in our net adds guidance for the second quarter,” said Rego, who did not provide the number of ACP subscribers the company has.
In the first quarter, WOW! reported total revenue of $161.5 million, down $10.7 million, or 6.2%, year over year. The company reported a net loss of $15 million for the quarter. High-speed data revenue came in at $106.2 million, an increase of $1.0 million, or 1.0%, compared to the first quarter of 2023.
Colorado-based WOW! also reported 15,000 new greenfield fiber passings in Michigan, Florida and South Carolina in the first quarter, bringing the total to 45,500. It also passed 3,000 new homes through edge outs, or the extension of existing plant to adjacent locations.
WOW!’s call with Wall Street analysts lasted less than 15 minutes because Elder and Rego declined to take questions in light of the company’s announcement last Friday that it had received an unsolicited buyout offer from DigitalBridge Investments and Crestview Partners at $4.80 a share, valuing WOW! at about $400 million.
“We don’t have any updates to share today,” Elder said.