Comcast CFO Jason Armstrong raised some eyebrows final month when he advised an investor convention that the broadband operator noticed some “irrational” pricing from sure fiber service suppliers pop up within the second quarter of 2026, after which proceed into the third quarter.
“Once we see fiber pricing, standalone fiber pricing, within the $30 to $40 vary for a Gig…that is what we imply by irrational. That to us isn’t a rational worth level,” he stated.
Armstrong did not determine that competitors by title, however analysts and different business observers imagine AT&T was who he was speaking about.
Whereas Armstrong wasn’t fallacious in regards to the pricing dynamics within the broadband market, these feedback served as “the cherry on high of an already unhealthy yr for cable traders,” MoffettNathanson analyst Craig Moffett defined in a new report on broadband pricing developments (registration required). Comcast and its cable friends have been attempting to reverse the pattern and return to broadband subscriber development with new pricing and packaging, together with worth locks, and mobile-broadband service bundles.
Knowledge shines some mild on what AT&T was doing. Moffett’s report, which used knowledge from Navi, discovered that AT&T had, within the earlier a part of the yr, been pitching 1-Gig fiber speeds for $35 per thirty days in a few of its most aggressive markets and in areas the place fiber companies have been simply being launched within the earlier a part of the yr.
And it wasn’t just a few kind of promo that will jack up costs a yr after a buyer signed up. “This was not an introductory price; there was no computerized step-up after 12 months,” Moffett defined.
Nevertheless it did impact the market. Comcast, he famous, quickly reduce the beginning worth of its 1-Gig service from $65 per thirty days to $40 per thirty days, and others, together with Verizon and Optimum Communications, additionally sweetened a few of their gives.
Value pendulum swinging the opposite approach
The excellent news – for Comcast, anyway – is that Navi’s knowledge, which is predicated on the gathering of greater than 100,000 broadband worth factors taken from greater than 30 US cable, fiber, mounted wi-fi and satellite tv for pc broadband operators, discovered that AT&T’s fiber pricing has returned to a extra rational degree, so to talk. The value in these markets for 1-Gig, the information reveals, lately rose to $40 per thirty days for the primary 12 months, however was then poised to leap to $80 per thirty days after that interval.
And that pattern has continued. “As of late August, the common price over the primary three years of subscribership in each ‘aggressive’ and ‘commonplace’ markets was within the $60 to $65 vary,” Moffett stated in his evaluation of the information. Then, after elevating costs on September 1, AT&T raised them once more.
And the value pendulum is swinging the opposite approach elsewhere. Navi’s October 1 report cited worth will increase or a pull again on promotional pricing for a number of different broadband service operators, together with Glo Fiber, T-Cellular and Ziply.
Eye on Spectrum
Moffett notes that Spectrum – now the model of the lately merged Constitution Communications and Cox Communications – has been an outlier amid the introduction of decrease broadband pricing in Cox markets that align with Constitution’s legacy pricing.
“We do not anticipate that stasis to final,” the analyst added, noting that some adjustments are doubtless in retailer as new Spectrum COO and former Frontier Communications CEO Nick Jeffery begins to implement his recreation plan. “Whether or not Constitution’s subsequent pricing strikes are increased or decrease stays to be seen, nonetheless. For context, in contrast to Comcast and its different cable friends, Constitution did not decrease costs over the summer time however as a substitute held them fixed even by way of AT&T’s most aggressive promotional interval.”
However anticipate some motion comparatively quickly. Throughout his look eventually week’s SCTE TechExpo in Atlanta, Spectrum CEO Chris Winfrey stated it’s essential for the corporate to enhance its go-to-market methods with revised pricing and packaging and to, extra usually, enhance the operator’s internet promoter scores.
“We are able to do higher,” Winfrey stated. “I do not suppose we must always wait.”
Value battle averted?
Moffett stated it is unclear if AT&T’s considerably latest aggressive pricing is a few kind of short-term experiment or one thing it will lean on to assist drive subscription demand when it wants a carry.
Greater image, Moffett stated it is too early to conclude that US broadband is in for an extended interval of falling broadband costs. However for now, anyway, the worry of a broadband worth battle has been tamped down.
“There may be all the time the possibility that among the newer will increase are merely ‘normalization’ after a livid end-of-quarter push to attain internet provides,” he wrote. “It is too quickly to name a definitive flip, however Navi’s new Broadband Intelligence service means that the path of journey is increased, a improvement that ought to be heartening to broadband traders.”
