Cable One, Inc. (CABO): 5 FORCES Analysis [Nov-2025 Updated]

You're assessing Cable One, Inc. (CABO) right now, and let's be real: the broadband market in late 2025 is a war zone, putting serious strain on their historically high margins. After years of watching these dynamics, I can tell you the core issue isn't just one rival; it's the combined weight of aggressive Fixed Wireless Access (FWA) and fiber overbuilders, which helped push their Q3 2025 revenue down 4.5% year-over-year. Before you make any moves, you need to see precisely how supplier costs are climbing while customer leverage-evidenced by residential data ARPU stabilizing around $80-is squeezing them from the other side. Keep reading for the full, unvarnished look at all five forces shaping Cable One, Inc. (CABO)'s near-term fate.

Cable One, Inc. (CABO) - Porter's Five Forces: Bargaining power of suppliers

You're looking at the supplier side of the equation for Cable One, Inc. (CABO), and honestly, it's a mixed bag, but the high-cost inputs definitely keep supplier leverage strong in key areas.

For video content, the power held by programming networks and those collecting retransmission fees remains a significant pressure point. While Cable One reported a year-over-year reduction in programming costs in both Q1 2025 and Q2 2025, the underlying risk is clear: the company explicitly notes the risk of increases in programming costs and retransmission fees as a factor that can materially affect its operations. This is the classic high-leverage supplier situation where a few content providers dictate terms.

When you look at the gear needed to keep the network competitive, the supplier base for specialized network equipment, particularly for the ongoing DOCSIS 4.0 rollout, is concentrated. Cable One is leaning into these upgrades to deliver multi-gigabit speeds, prioritizing them over a full Fiber-to-the-Premises (FTTP) buildout. To give you a sense of the industry push, nearly 48% of cable companies planned to activate DOCSIS 4.0 by the end of 2025, and nearly 65% of cable professionals indicated their companies would install DOCSIS 4.0-capable equipment "as soon as it is available." This rush to adopt new, complex hardware means vendors who can supply certified DOCSIS 4.0-capable modems and Cable Modem Termination System (CMTS) components hold considerable sway.

We can map out the recent capital deployment related to these network investments:

The Q1 2025 figure of $71.1 million for capital expenditures on network upgrades directly reflects the financial commitment required to keep pace with supplier technology roadmaps. It's worth noting that this was 8% higher than the prior year's first quarter spend.

Finally, the costs for the physical infrastructure-the raw materials-introduce another layer of supplier risk. You have to watch for volatility affecting the cost of fiber and coaxial cable. The company's risk disclosures specifically cite concerns over:

• Supply chain disruptions.
• Changes in rates of inflation.
• Adverse economic conditions.

Even as Cable One saw a 15.8% year-over-year reduction in residential video revenues in Q2 2025 due to subscriber loss, the underlying material costs for maintaining and expanding the data network-the core business-are subject to these external commodity pressures. That's the quick math on supplier power; the specialized tech and content providers are definitely in the driver's seat.

Cable One, Inc. (CABO) - Porter's Five Forces: Bargaining power of customers

You're looking at the customer power in the Cable One, Inc. (CABO) business, and honestly, the numbers show customers have a real say right now. When subscribers can easily walk away, it forces management to be very careful about pricing and service quality. This is especially true as the industry shifts.

The video product is clearly on its way out, which gives the remaining video customers leverage. In the third quarter of 2025, residential video revenues dropped by $8.7 million year-over-year, which translates to a 16.2% decline in that segment due to subscriber churn. That's a massive drop in a legacy service. For the core data business, the customer base is also shrinking, with residential data subscribers at 910,400 in Q3 2025, down by 149,100 compared to the same quarter last year. That kind of attrition gives the remaining customers more negotiating room.

The competitive environment definitely increases this leverage. While I don't have a precise figure for Cable One, Inc.'s direct competitive overlap percentage for late 2025, the sheer presence of rivals offering alternatives like fiber and fixed wireless access means customers have options to switch to, which naturally increases their switching leverage.

Residential data Average Revenue Per User (ARPU) shows the pressure you are under to keep prices competitive. For instance, in Q4 2024, the residential data ARPU was $79.72. Looking at the most recent data, Q3 2025 saw a 3.2% year-over-year increase in data ARPU, which followed a 3.1% decrease in Q1 2025. This choppy performance suggests management is balancing price increases against subscriber retention, indicating that ARPU is indeed pressured and stabilizing, rather than aggressively rising.

The loss of federal support programs further complicates the customer dynamic, as it directly impacts the affordability for a segment of your base. The Affordable Connectivity Program (ACP), which offered a $30/month subsidy, officially ended in mid-2024. Before it ended, over 23 million U.S. households relied on that support. Surveys indicated that up to 77% of those former ACP households might change or cancel their service without it. This means a segment of the customer base that was previously subsidized is now highly sensitive to price hikes, increasing the risk of churn and strengthening their bargaining power for lower-cost options.

Here's a quick look at the key customer-facing metrics from the recent reporting period:

The power of the customer base is further illustrated by the recent subscriber trends. You see the direct impact of competition and price sensitivity in the data.

• Residential video subscribers are rapidly declining, down 16.2% YoY in Q3 2025.
• Residential data revenues fell 1.2% year-over-year in Q3 2025.
• The company experienced 'higher than expected churn in residential data customers' in Q3 2025.
• The loss of the $30/month ACP subsidy creates price sensitivity for millions of former enrollees.

Finance: draft 13-week cash view by Friday.

Cable One, Inc. (CABO) - Porter's Five Forces: Competitive rivalry

You're looking at Cable One, Inc. (CABO) right now, and the competitive rivalry force is definitely showing up in the numbers. The pressure from alternative technologies is real, and it's hitting the top line.

The most concrete evidence of this market friction is in the latest reported financials. For the third quarter of 2025, Cable One, Inc. reported total revenues of $376.0 million, which was a 4.5% year-over-year decline from the $393.6 million seen in Q3 2024. That revenue drop signals that the market is actively choosing other options, or at least that Cable One, Inc. is having to fight harder for every dollar.

This rivalry is playing out across two major fronts: the fiber buildout and the wireless alternative.

The threat from Fiber-to-the-Home (FTTH) providers and overbuilders is significant. For instance, you have major carriers like AT&T setting aggressive buildout targets, aiming to pass 30 million homes by the end of 2025. When pure fiber passes that many homes, it directly challenges the incumbent cable infrastructure Cable One, Inc. relies on. This forces the rivalry into a speed war, where network superiority becomes the main battleground.

Fixed Wireless Access (FWA) from wireless carriers is aggressively taking market share, especially where Cable One, Inc. has a strong footprint in rural areas. The success of FWA, fueled by 5G and mid-band spectrum, means a lower-cost, lower-setup alternative is readily available to price-sensitive customers.

Here's a quick look at how the core residential segment is reflecting this competitive intensity as of Q3 2025:

The focus of this rivalry is definitely on the price tag and the gigabit promise. Cable One, Inc. is countering by emphasizing its speeds and, importantly, by launching new product initiatives. You see them piloting a new mobile service, which is a classic cable industry move to bundle and increase customer stickiness against FWA threats.

The financial results show the cost of this fight, even with strong earnings management. While Adjusted EBITDA was $201.9 million for the quarter, representing a 53.7% margin, the company is actively managing its balance sheet to weather this storm. They paid down nearly $200 million in debt during the quarter, including $197.9 million of total debt reduction. That cash management is defintely a response to the uncertainty in the competitive landscape.

The key competitive pressures Cable One, Inc. is facing include:

• Intense FTTH deployment by rivals like AT&T.
• Aggressive FWA market share capture by wireless carriers.
• Subscriber churn in the core residential data segment.
• Need for promotional pricing to retain customers.

Finance: draft sensitivity analysis on ARPU change vs. FWA price parity by next Tuesday.

Cable One, Inc. (CABO) - Porter's Five Forces: Threat of substitutes

You're looking at the competitive landscape for Cable One, Inc. (CABO) as of late 2025, and the threat of substitutes is definitely one area demanding close attention. We see this pressure coming from multiple angles, particularly as alternative technologies mature and gain traction, especially in the rural and suburban areas where Cable One, Inc. has a strong footprint.

The most visible impact on the legacy product side is the continued erosion of the video offering. Over-The-Top (OTT) streaming services entirely replace the traditional video product for many customers. This isn't just a trend anymore; it's a financial reality reflected in the numbers. For the third quarter of 2025, Cable One, Inc.'s residential video revenues were down $8.7 million, which translates to a 16.2% year-over-year decline. Honestly, that's a massive shift away from the bundled TV product.

Now, let's talk broadband, which is the core business. Fixed Wireless Access (FWA) is a low-cost, high-speed broadband substitute that is gaining ground quickly. It offers a compelling alternative, especially where Cable One, Inc. infrastructure deployment is slower or more expensive. Similarly, satellite internet, particularly with the expansion of low-Earth orbit constellations like Starlink, is a viable substitute in Cable One's rural markets. These alternatives put a ceiling on how much pricing power Cable One, Inc. can exert on its data services.

We can see the substitution effect bleeding into the primary revenue stream. Residential data revenue decreased 1.2% year-over-year in Q3 2025, showing substitution impact. Here's the quick math on that segment for the third quarter of 2025:

What this estimate hides is the underlying churn pressure. Even though residential data average revenue per unit (ARPU) managed to increase by 3.2%, the subscriber base still fell by 5.1% year-over-year, leading to that net revenue drop. It tells you that while Cable One, Inc. is successfully getting more money from the customers it keeps, it is losing customers to those substitutes.

The competitive dynamics are forcing Cable One, Inc. to focus on its fiber buildout and business data services, which saw modest growth. The pressure from FWA and satellite means that for the residential base, the value proposition has to be rock solid. You're fighting against services that can be deployed faster and often at a lower initial cost to the end-user.

Here are the key takeaways on the revenue dynamics impacting the substitute threat:

• Residential data revenues for Q3 2025 were $227.6 million.
• Residential data ARPU grew by 3.2% year-over-year.
• Residential video revenues fell by $8.7 million year-over-year.
• The company is actively investing in growth enablement platforms to counter competitive pressures.

Finance: draft 13-week cash view by Friday.

Cable One, Inc. (CABO) - Porter's Five Forces: Threat of new entrants

You're analyzing the barriers to entry for Cable One, Inc. (CABO) in late 2025, and the picture is one of high upfront costs for traditional competitors but a rapidly evolving, lower-cost threat from wireless alternatives. The threat of new entrants isn't uniform; it's split between the massive hurdle of digging trenches and the relative ease of launching a wireless service.

High capital expenditure is required for new wireline infrastructure build-out.

Building out a new hybrid-fiber-coaxial (HFC) or fiber-to-the-home (FTTH) network requires serious, sustained investment, which naturally deters many potential entrants. For Cable One, Inc., capital expenditures (CapEx) in the first half of 2025 show this commitment. In the first quarter of 2025, CapEx totaled $71.1 million, and this figure was $68.4 million in the second quarter of 2025. To be fair, a portion of this spending, $8.7 million in Q2 2025, went toward new market expansion projects, showing the ongoing cost of growth even for an incumbent. This high cost structure is a significant moat against a competitor trying to replicate Cable One, Inc.'s existing footprint from scratch.

Securing local franchise agreements and rights-of-way acts as a significant barrier.

Beyond the physical build, the regulatory and municipal landscape presents a major hurdle. Cable One, Inc. faces the risk of not being able to renew existing cable system franchises, a factor management notes as a business risk. Furthermore, the process for new entrants to gain access to public rights-of-way is often contentious and complex. We see this in ongoing legislative debates, such as in Nevada, where there is discussion about updating statutes to create a dedicated pathway for 'broadband-only' providers to obtain local franchise agreements, suggesting the current framework is not always clear or easy to navigate for newcomers. Navigating these local negotiations can cause delays and increase soft costs for any potential overbuilder.

Overbuilders deploying fiber networks in existing markets represent the main entrant threat.

The most direct threat to Cable One, Inc.'s established footprint comes from fiber overbuilders. These entrants are not deterred by the 'gentlemen's agreements' of the past; they actively target incumbent areas with superior technology. Nationally, the U.S. reached 76.5 million homes passed by fiber as of early 2025, with 10.3 million new homes passed in 2024 alone. Where FTTH is deployed, it exerts serious pressure; HFC networks have seen a 33% decline in markets where fiber is available. This competitive intensity is why Cable One, Inc. has seen its broadband customer base erode, losing 2.6% of its customers between Q1 2024 and Q2 2025.

FWA providers bypass traditional infrastructure barriers, lowering the entry cost for broadband.

Fixed Wireless Access (FWA) providers represent a fundamentally different, lower-barrier threat. They leverage existing mobile infrastructure, avoiding the massive CapEx associated with trenching and laying new cable or fiber. This allows them to enter markets rapidly, especially underserved or lower-density areas where wired deployment is uneconomical. In the U.S., FWA has already captured a significant base, with around 13 million subscribers as of late 2025. This segment is a major growth engine for mobile operators and is projected to see its market size grow from $42.61 billion in 2025 to $127.57 billion by 2032. In fact, one of the factors cited for customer churn at Cable One, Inc. in Q1 2025 was the shutdown of fixed wireless towers, showing the direct competitive impact.

Here's a quick look at the financial and market context shaping this threat:

The threat is multifaceted: established fiber players require massive capital but offer superior service, while FWA players require less capital and can enter quickly, monetizing existing spectrum assets. Finance: draft 13-week cash view by Friday.