Cable’s Decline Accelerates: Why Fiber, Costs, and B2B Now Drive Value

KeyBanc’s commentary reflects more than a temporary wobble—it signals a structural re-assessment of cable as an industry facing durable impairment. The “permanent impairment” thesis emerges from a convergence of macro trends and firm-specific weak performance. Chief among these is the steady decline in video/linear cable households, leading to weakening carriage revenues; cord-cutting is no longer episodic but a core challenge. At the same time, broadband competition is intensifying—fiber and fixed wireless access (FWA) are increasingly viewed as superior long-term substitutes, eroding what had been cable’s dominant position in high-speed data.

Evidence of this impairment shows up in various E&P decisions and financial metrics. Cable One suffered a full-quarter miss in high-speed data subscriber additions, a drop in ARPU, and revenue revenue decline in residential data segments. Its first-quarter 2025 results showed net income plunging (from ~$37.4 million to ~$2.6 million YoY), shrinking margins, and the suspension of its dividend—all alarming markers of distress [6][1]. Comcast, a proxy for large cable incumbents, was recently downgraded by KeyBanc due to “increased spending concerns” and a lack of catalysts, even as broadband and mobile nets added some positives—suggesting that structural costs and future capital intensity are undermining investor confidence [3][4].

Competitive dynamics exacerbate the challenge. Established telecoms like AT&T and Verizon are aggressively expanding fiber, while cable operators face technological and regulatory headwinds in matching up. T-Mobile has been flagged by KeyBanc for being “fiber-deficient” in the sort of converged/home-bundled world that customers and regulators increasingly prize [5][2]. As competition shifts focus to value bundles combining fiber broadband, mobile, and sometimes video, cable’s hybrid fiber-coax or legacy video business loses edge.

Valuation adjustments are under way. KeyBanc has cut price targets (e.g. Cable One’s PT lowered to ~$650 from $825 earlier in 2025), downgraded ratings (Cable One floated down to Sector Weight; Comcast dropped from Overweight to Sector Weight), and highlighted that multiples are compressing industry-wide [1][9][6]. These changes reflect elevated risk premiums—especially execution risk—and less confidence in future growth from traditional segments.

For investment bankers and strategic planners, the implications are multifacted. M&A may increase—whether to consolidate scale, acquire fiber assets, or offload declining video ones. Capital allocation will shift toward fiber infrastructure, enterprise data, and other growing segments. Dividend/special yield strategies may unwind. And firms must invest in execution systems—product innovation (e.g. value propositions like “Flex Connect”, “Lift”), churn management models, and bundling to stay competitive.

Open questions abound: (1) How quickly can cable operators convert or upgrade their HFC (hybrid fiber coaxial) networks to full fiber? (2) What regulatory or policy tailwinds (subsidies, universal broadband) might help or hurt incumbents? (3) To what extent can cost cuts/efficiencies offset declining revenue? (4) Which firms are best positioned (in geography, balance sheet, execution) to succeed—and which may be ripe targets?