S&P downgrades Cable One to ’B+’ on weakening broadband outlook

S&P Global Ratings has reduced Cable One Inc's credit rating to 'B+' from 'BB-', reflecting declining business prospects due to fierce competition from fiber-to-the-home and fixed wireless providers. The agency has placed Cable One on CreditWatch with a negative outlook, indicating a probable one-notch downgrade to 'B' after the company completes its pending acquisition of Mega Broadband Communications Investments (MBI).

The threat comes from intensifying pressure from low-cost fixed wireless options and the expansion of fiber overbuilds, which are eroding Cable One's high-margin business model. With fiber overlap exceeding 60% and fixed wireless firms offering plans at around $50 per month, the company's average revenue per unit stands at about $80, putting its subscriber base at risk.

S&P projects a decline in residential broadband penetration to around 28% by 2028, down from 33.5% in 2025. While the company has implemented promotional pricing to retain subscribers, analysts anticipate these discounts to further erode average revenue and broadband earnings in the medium term. The CreditWatch status highlights risks related to the planned Oct.

1 closing of the MBI transaction, which is expected to elevate consolidated leverage to the low-5x range. Under revised forecasts, S&P expects full-year 2026 earnings to decline by 10% to 11% at Cable One and 15% to 16% at MBI, following substantial EBITDA declines in the second quarter across both companies. Additionally, Cable One faces substantial capital structure challenges ahead of a significant debt wall in 2028.

The company has already drawn $700 million on its revolving credit facility this month, leaving it with approximately $2.3 billion in debt maturities due that year. Should refinancing risks persist, this could prolong the negative CreditWatch status post-closing.