& cplSiteName &

Comcast's $1B Bandwidth Plan

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
4/30/2009
50%
50%

Comcast Corp. (Nasdaq: CMCSA, CMCSK) expects to shell out $1 billion for an "all-digital" project that will enable the MSO to reclaim 40 to 50 channels of analog spectrum and free up room for Docsis 3.0, a broader video-on-demand (VoD) library, ethnic programming fare, and more than 100 linear hi-def channels.

That's according to Comcast cable division president Steve Burke, who spent a good chunk of this morning's earnings call describing and defending the MSO's big bandwidth-reclamation strategy. (See Comcast Posts Q1.)

That strategy, called Project Cavalry, is "one of the most important projects for us this year," Burke said. "This project is going to deliver more additional bandwidth than any improvement we've ever made."

The moves allow Comcast to recapture up to 300 MHz of spectrum, more than it got when the MSO upgraded 500 MHz plant to 750 MHz. "We estimate the total cost of about $1 billion is less than 10 percent of what a physical rebuild would cost us historically, and we can complete it in a fraction of the time," Burke said, noting that the investment will be spread out over 2009 and 2010.

But Comcast's definition of "all-digital" is a bit wide of the truth. The company intends to leave a programming tier of 20 to 30 channels in analog. About 14 percent of Comcast's customers take its analog service today, and roughly 72 percent have already made the leap to digital.

Depending on the customer's current level of service, the MSO is giving away a number of simple, $30 digital terminal adapters (DTAs) to ensure that secondary TVs customer homes can continue to receive and display programming in the expanded basic tier once it's moved to digital. (See slide 10 in this PDF.) Burke estimates that Comcast will need to deploy about 20 million digital devices for the transition. (See Comcast Seeds Digital Shift With Free Boxes.)

In addition to the cheap DTAs, Comcast is trying to keep costs in check with self-installation kits that curtail the need for pricey truck rolls. The MSO estimates that about 75 percent of customers so far have elected the self-install option.

Comcast already has the project underway in areas such as Portland, Ore., Seattle, and the Bay Area, and is starting to tee it up in its Atlanta, Philadelphia, and Baltimore markets. By the end of the quarter, Comcast had completed the job in about 5 percent of its footprint. (See Comcast 'Cavalry' Rides Into NoCal , Comcast Expanding 'All-Digital' Domain , and Comcast Sends In the All-Digital 'Cavalry'.)

"The results in Portland have been encouraging enough that we are looking at speeding up our rollout to over half our footprint by the end of this year," Burke said, adding that the conversions have given a 20 percent-plus return on investment so far.

During the call, an analyst asked Comcast why it has favored going all-digital over other bandwidth management strategies, such as switched digital video (SDV) or moving to 1 GHz. It's all about timing, ease of deployment, and, of course, the almighty dollar.

"I want to spend as little as possible. I want to have the minimal intrusion on the customer experience. When you analyze all those variables, and you can get a digital adapter for around $30… it all points to going all-digital," Burke explained.

Financial update
Like its smaller MSO counterpart, Time Warner Cable Inc. (NYSE: TWC), Comcast's revenues and profits both jumped in the first quarter, despite the economy and competition from telcos and satellite TV providers.

Table 1: Earnings Snapshot

1Q08 1Q09 Change (%)
Revenues ($B) 8.389 8.835 5%
Net Income ($B) 0.732 0.772 5%
EPS ($) 0.24 0.27 13%
Source: Comcast Corp.




But there was more excitement about Comcast's 95 percent growth rate of free cashflow (FCF), which ballooned to $1.4 billion in the first quarter as capital spending dipped 19 percent, to $1.16 billion, and the MSO tightened its grip on other cost controls.

But what will the MSO do with all that dough? "With prodigious FCF all but assured for 2009, a resumption of Comcast's share repurchase program would seem a logical step," Sanford C. Bernstein & Co. Inc. analyst Craig Moffett suggests in a research note.

Comcast added 288,000 digital video customers but lost 78,000 basic subs. However, those losses were better than the 171,000 expected by analysts, and apparently kept in check by customers signing on during the broadcast digital TV transition, which won't be done until this June.

Comcast also added 329,000 high-speed customers, giving it a total of 15.2 million, and 298,000 digital voice customers, extending that total to 6.77 million. Comcast still has 2,000 customers taking phone service using old, crusty circuit-switched technology.

— Jeff Baumgartner, Site Editor, Cable Digital News

(9)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
InterestedObserver
50%
50%
InterestedObserver,
User Rank: Light Beer
12/5/2012 | 4:05:42 PM
re: Comcast's $1B Bandwidth Plan


Jeff- I lke your style of breaking down these issues into understandable terms.


Great article.


 

Jeff Baumgartner
50%
50%
Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 4:05:41 PM
re: Comcast's $1B Bandwidth Plan
Thanks, you're too kind. Now, what do I owe you?
Jeff Baumgartner
50%
50%
Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 4:05:40 PM
re: Comcast's $1B Bandwidth Plan


Also, it's not entirely clear here, but Comcast said 14% of subs presently take the "lifeline" basic analog tier  (20-30 channels), another 14% also take the "expanded" analog basic tier (which is moving to digital), and 72% are already getting digital.


 

menexis
50%
50%
menexis,
User Rank: Light Beer
12/5/2012 | 4:05:40 PM
re: Comcast's $1B Bandwidth Plan
I'm always amazed by what Comcast is able to do. They are sitting on a lot of money.
OldPOTS
50%
50%
OldPOTS,
User Rank: Light Beer
12/5/2012 | 4:05:39 PM
re: Comcast's $1B Bandwidth Plan


Are they adding capacity on the backend, behind headends, for these new services/apps?


OP


Great Info!

Jeff Baumgartner
50%
50%
Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 4:05:39 PM
re: Comcast's $1B Bandwidth Plan


The way I understand it, they aren't really adding any new capacity, but reusing/redeploying some of the spectrum that's tied up with analog TV services today toward new digital video and Docsis IP services.  Page 9 of that Comcast Q1 PDF has a good view of the spectrum situation before and after the analog spectrum is reclaimed.


That said, there are also some rumors that Comcast has looked at 1GHz too, but I haven't been able to find anything to corroborate any significant deployment of it.  Of course, any new amps MSOs buy are 1 GHz, but they don't get any of the spectrum benefits if they don't actually turn up the capacity. Same goes for new STBs and modems...they all have 1 GHz tuners now....just in case MSOs other than Cox move to 1 GHz in a big way.

Jeff Baumgartner
50%
50%
Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 4:05:38 PM
re: Comcast's $1B Bandwidth Plan


Sorry, misread you there...as far as capacity goes, they've discussed doing some Start Over apps and building a much larger video server infrastructure, which should drive usage.  Multichannel News  ran this piece about the next steps for Project Infinity, something along the lines of a VoD vault with 100K titles, about 10x where they are today.   As for Docsis, getting some of that analog spectrum back could put them on a path toward 100 Mbit/s since they'll have more channels with which to bond.  Of course the one thing this strategy doesn't do is give them any help with the upstream...unless they are thinking of doing a very complicated mid-split somewhere down the road.


 


 

OldPOTS
50%
50%
OldPOTS,
User Rank: Light Beer
12/5/2012 | 4:05:38 PM
re: Comcast's $1B Bandwidth Plan


I understand this will "enable the MSO to reclaim 40 to 50 channels of analog spectrum and free up room for Docsis 3.0, a broader video-on-demand (VoD) library, ethnic programming fare, and more than 100 linear hi-def channels."


My intended question was inquiring if they were adding additional service capacity, BW/servers, to fil that new reclaimed delivery capacity?


OP





menexis
50%
50%
menexis,
User Rank: Light Beer
12/5/2012 | 4:05:37 PM
re: Comcast's $1B Bandwidth Plan
Who knows. I'm not sure if they will be adding anything new
From The Founder
Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Documentaries
YouTube Takes on Facebook Live-Streaming

2|17|17   |     |   (0) comments


Popular 'YouTubers' will be the first to get the new service on their smartphones. You have been warned.
LRTV Custom TV
Open Source NFV/SDN Automation

2|17|17   |   05:54   |   (0) comments


AT&T ECOMP (Enhanced Control, Orchestration, Management and Policy) code is transitioning into the Linux Foundation for placement into open source. In this video, Carol Wilson provides an update on the maturation of open source ECOMP and meets with industry leaders from AT&T, Bell Canada, Orange, Linux Foundation and Amdocs to discuss what this means for the ...
LRTV Documentaries
Uber & NASA Collaborate on Flying Car Project

2|16|17   |     |   (0) comments


Is Uber for real? Well, it's hired NASA engineer Mark Moore to lead the project, and he wouldn't come cheap.
LRTV Documentaries
Zuckerberg Tries Out the Oculus Rift VR Glove

2|15|17   |     |   (0) comments


Facebook CEO shows off a new way to interact with the Oculus Rift virtual reality headset: an Oculus glove.
LRTV Custom TV
Huawei Digital Transformation Forum 2017

2|10|17   |     |   (0) comments


Here's a preview of the upcoming Huawei Digital Transformation Forum taking place in Barcelona with trending telecom topics like cloud, IoT, 5G and much more!
Telecom Innovators Video Showcase
Dan Sahar of Qwilt on Open Edge Cloud Platform

2|8|17   |   08:38   |   (0) comments


Dan Sahar, Qwilt's co-founder, sits down with Steve Saunders of Light Reading for a conversation about Qwilt's Open Edge Cloud platform and the new role of service providers in application and content delivery.
LRTV Documentaries
ZeroStack's 'Self-Driving Cloud'

2|7|17   |   01:09   |   (0) comments


Its Z-Brain tech automates day-to-day management and long-term planning for hybrid clouds.
Telecom Innovators Video Showcase
Nominum's Craig Sprosts on DNS & Cybersecurity Trends

2|7|17   |     |   (0) comments


Nominum's Craig Sprosts talks about the fast-changing landscape of cybersecurity with Steve Saunders of Light Reading. Sprosts touches on the trend of the rise of ransomwares, rivals of IoT base attacks, and mobile network security. He also discusses the realization of the importance of IoT security after a recent cyber attack that paralyzed several major ...
LRTV Documentaries
China Moves Towards Mixed Ownership of Telcos

2|1|17   |   01:10   |   (0) comments


Chinese authorities are promoting new ownership models in order to raise capital.
Shades of Ray
What to Expect at MWC 2017

1|31|17   |     |   (0) comments


5G is set to dominate as the key buzz term at this year's Mobile World Congress but there are other pressing 4G matters to address.
Telecom Innovators Video Showcase
Versa: A Lot More Than SD-WAN

1|31|17   |     |   (0) comments


Kelly Ahuja, the new CEO of Versa Networks, speaks with Steve Saunders of Light Reading about how Versa offers much more than just SD-WAN, and its plan to grow market adoption in 2017.
LRTV Documentaries
Facebook Gets Physical With Its Security Strategy

1|31|17   |   00:48   |   (0) comments


Facebook has introduced new measures that will enable users to secure access to their accounts using a physical 'key' application.
Upcoming Live Events
March 21-22, 2017, The Curtis Hotel, Denver, CO
March 22, 2017, The Curtis Hotel, Denver, CO
March 22, 2017, The Curtis Hotel, Denver, CO
May 15-17, 2017, Austin Convention Center, Austin, TX
May 15, 2017, Austin Convention Center - Austin, TX
June 6, 2017, The Joule Hotel, Dallas, TX
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
T-Mobile CEO: M&A Coming but Not Quite Yet
Dan Jones, Mobile Editor, 2/14/2017
Is the Time Right for a Cisco/Ericsson Wedding?
Ray Le Maistre, Editor-in-chief, 2/17/2017
Nice to See at Least One CSP Taking My Advice
Mitch Wagner, Editor, Enterprise Cloud, 2/17/2017
Time to Invest in Virtual Reality?
P. Tracy Currie, CEO and Co-Founder, Capto Consulting, 2/13/2017
Charter Launches 5G Field Trials
Mari Silbey, Senior Editor, Cable/Video, 2/16/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading founder and CEO Steve Saunders chats with Sportlogiq CEO Craig Buntin about sports data analysis.
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Animals with Phones
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.