Comcast (CMCSA.US) is grappling with a significant challenge in its core business segment that provides internet access to nearly 30 million American households, as user numbers continue to decline. The Philadelphia-based telecommunications and media giant has recorded broadband user losses for three consecutive quarters, with total account losses exceeding 500,000. The decline stems from the termination of federal subsidies for low-income users during the pandemic period and intensified competition from telecommunications companies like T-Mobile US (TMUS.US), which are aggressively promoting alternative solutions to capture consumer market share.

Comcast CEO Brian Roberts and his team have taken urgent action by bringing in new management for the broadband division, introducing new pricing schemes, and intensifying promotion of other products such as wireless phone services to supplement their internet and cable television businesses. Despite these efforts, the trend of subscriber cancellations shows no signs of ending in the near term.

"We cannot predict when we'll return to positive user growth," Chief Financial Officer Jason Armstrong said in an interview, "but everything we're doing now is aimed at getting the company back on a healthier development track."

For years, this company founded by Roberts' father through the acquisition of a pay-TV franchise in Tupelo, Mississippi, has been the king of cable television. However, as consumers abandon expensive TV packages in favor of streaming services like Netflix (NFLX.US), Comcast's video business has shrunk. Its current cable TV subscriber base of 11.8 million represents less than half of its 2008 peak.

As this business continues to contract, Comcast can no longer easily cross-sell internet services to cable TV subscribers. "Pay-TV cord-cutting is actually a catalyst affecting the broadband business because you no longer have the advantage of bundled packages," noted streaming consultant Dan Rayburn, "and value has always existed in the bundle."

During the pandemic, Comcast, like other operators, experienced growth opportunities as consumers recognized the indispensability of reliable home internet. Short-term federal internet subsidies from 2020 to 2022 also helped Comcast add a batch of new broadband users. However, the situation began reversing from mid-2023.

AT&T (T.US), Verizon Communications (VZ.US), and T-Mobile US are leveraging their wireless networks to provide internet services at prices attractive to budget-conscious consumers. In the second quarter alone, these three major telecommunications operators added over 900,000 "fixed wireless" accounts.

Comcast and its peers have traditionally provided internet services through hybrid fiber and coaxial cable connections, while these three telecommunications companies are also investing in building high-speed fiber lines directly to homes.

Under pressure, Comcast management has responded on multiple fronts. The company launched low-speed, low-price packages for low-income consumers and in April introduced new internet pricing schemes for all users, including a five-year price guarantee commitment. Packages start at $55 per month, including taxes and equipment fees. This new strategy contrasts sharply with the past approach of typically offering discounts for the first year or two, followed by significant monthly fee increases.

The company has also intensified promotion of wireless phone services, offering users who subscribe to five-year internet packages one year of free mobile service. Armstrong stated that through long-term cooperation agreements with Verizon and expanded use of proprietary infrastructure, Comcast can provide mobile services at lower prices, thereby undermining competitors' advantages.

In the second quarter, the company added a record 378,000 wireless lines. The core strategy is that through price guarantee policies, internet users will continue choosing Comcast and eventually pay for wireless phone services as well. Armstrong noted early signs show users also tend to choose faster speeds (meaning more expensive internet packages), which is an encouraging trend.

"Currently, the product most bundled with broadband business is wireless service," he said. "This is the future bundle model."

The company has also restructured management of its U.S. regional connectivity business, promoting Steve Cronie to Chief Operating Officer and hiring former Apple and DirecTV executive Jon Gieselman as Chief Growth Officer. The company is also taking measures to improve customer service.

Beyond broadband challenges, Comcast continues investing in other businesses, including theme parks and commercial telecommunications services, achieving revenue growth every year since 2020. In late 2025, the company will spin off cable networks like MSNBC and USA, divesting this business facing dual pressures from declining subscription revenue and advertising due to the shift to streaming.

Comcast stated that after the spinoff is complete, growth businesses including residential broadband will account for 65% of total revenue. While the company works to resolve broadband issues, sales are expected to remain essentially flat this year, with 3% growth projected for 2026.

Unless there's a turnaround, 2025 will mark the fourth declining year for Comcast stock over the past five years. Year-to-date, the stock has fallen approximately 11%, while the S&P 500 has gained 10% over the same period.

"This isn't a quick-fix solution," said Recon Analytics analyst Roger Entner. "This requires years of technological and cultural change, and cultural transformation is always the most difficult to achieve."