Your internet bill is one of the few monthly costs you almost never shop around. You signed up, set autopay, and moved on.
That habit has been worth a fortune to the cable companies that wire American homes. For decades, the choice in most neighborhoods came down to one cable provider, and it priced its plans accordingly.
That grip is slipping. Charter Communications (CHTR), which sells internet under the Spectrum brand, lost 172,000 broadband customers in the second quarter, Light Reading reported July 24.
Comcast (CMCSA) shed 167,000, according to Broadband Breakfast on July 23. Optimum lost another 40,000, Fierce Network reported Aug. 10. The company said it was also exiting some low-density markets in its West footprint, the same report showed.
Charter has mostly pinned its losses on fiber and fixed wireless rivals rather than satellites, Light Reading reported.
Charter’s average residential broadband customer paid $70.16 a month, down 1.5% from a year earlier, Light Reading reported. Now Elon Musk’s SpaceX (SPCX) has put a number right beside it.
On Oct. 20, SpaceX said Starlink’s average consumer paid $69 a month as the service added 1.6 million subscribers in the third quarter. Total revenue jumped 161% to $14.6 billion, according to Quartz.
SpaceX’s $14.6 billion quarter ran on two very different engines
The headline number came mostly from artificial intelligence. SpaceX’s Super Intelligence segment brought in $7.6 billion, up 830%, while its connectivity business grew 69% to $5.2 billion, Quartz reported Oct. 20.
The company also swung to a $4.4 billion profit from a $1.1 billion loss a year earlier. Revenue topped the $12.87 billion analysts expected, and adjusted earnings of 35 cents a share beat the 13-cent forecast, according to Investing.com.
Shares rose 6.6% after hours to $157.59 on Oct. 20, the same report showed. Check the live quote before you act, because that move was still settling on Oct. 21.
In my analysis, the AI number grabs attention, but connectivity is the part that touches your household budget. That is the business now competing for the same monthly payment your cable company counts on.
AdrianHancu / Getty Images
Why Starlink’s subscriber gain matters for cable companies
The comparison needs one caveat up front.
Starlink’s 1.6 million additions are global consumer subscribers, which Chief Financial Officer Bret Johnsen said came mostly from “more developed markets.” The cable losses are U.S. figures.
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Even with that gap, the trend is hard to ignore. Starlink ended June with 12 million subscribers, as TheStreet reported in Bank of America’s wireless reality check on SpaceX, and reached 13.6 million by the end of September.
Charter had 29.38 million broadband customers at the end of June, Light Reading reported. That means Starlink’s consumer base is already close to half the size of the company behind Spectrum.
The two bills are also moving in opposite directions. Starlink’s average bill rose 5% from the prior quarter, Johnsen said on the call, while Charter’s fell 1.5% from a year earlier. I ran the math, and the gap between them is now $1.16 a month.
Here is what the latest round of filings and calls shows about where this goes next:
- Starlink Mobile: The service passed 22 million monthly users, up 37% from the prior quarter, President Gwynne Shotwell said.
- New spectrum: SpaceX is buying Grain Management’s nationwide 800 MHz spectrum for Starlink Mobile, Telecompetitor reported Oct. 19.
- Carrier ambitions: The spectrum “will pave the way for Starlink Mobile to become a major mobile carrier in the U.S.,” Shotwell said.
- Cable keeps the door open: On satellite wholesale deals, Charter CEO Chris Winfrey said, “If it’s going to be material, it’s certainly something we would think about,” Fierce Network reported.
Spectrum and Comcast bosses say their networks still win
The cable companies are not conceding. Asked whether Starlink would be the main rival in urban and suburban markets, Winfrey said, “Do I think it will be the competitive solution for those? No,” according to Broadband Breakfast.
Comcast was just as blunt. “In reference to fixed wireless and satellite, our network far exceeds what they have,” said Steve Croney, chief executive of Comcast’s connectivity business, the same report showed.
Related: T-Mobile pushes back on SpaceX’s bid to take its customers
Winfrey did concede one thing. Charter’s rural builds were increasingly reaching homes that already had Starlink, which slowed its sign-ups there, Broadband Breakfast reported.
I think the cable executives have a point in dense neighborhoods, where a coaxial or fiber line carries far more traffic than a satellite beam. The risk sits at the edges of their maps, in rural homes where Starlink is now there first.
How the satellite race could lower your internet bill
Do not expect Starlink to start a price war. It raised consumer plan prices by $5 to $10 a month in May, as TheStreet reported in its look at a troubling Starlink pricing trend, and its average bill rose again last quarter.
Your savings come from the pressure Starlink and fiber put on everyone else. Optimum just rolled out a customer appreciation program with giveaways and perks, Telecompetitor reported.
That gives you bargaining power at renewal time. Call your provider, name the alternatives in your ZIP code, and ask for the promotional rate.
Musk is aiming much higher than your monthly plan. He said SpaceX sees “a clear path to several hundred billion dollars a year in connectivity revenue.”
For scale, Charter’s $13.52 billion second quarter works out to about $54 billion a year, based on Light Reading‘s figures. Musk’s target is several times Charter’s entire business, and the phone service tied to that new spectrum isn’t expected until early 2028, Shotwell said on the call.
The next test arrives fast. Comcast reports third-quarter results on Oct. 22, and Verizon follows on Oct. 26.
Watch the broadband line in both reports. If the losses keep coming while Starlink keeps adding, your next renewal call gets a lot more interesting.
Related: SpaceX has a plan to make your phone carrier obsolete
