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Cable/Video

2020 set up as 'an investment year' for Comcast, CEO says

Comcast's US broadband business is off to a "fast start" in the early part of the year, but 2020 will likely go down as "an investment year" for the company, Brian Roberts, Comcast's chairman and CEO, said Tuesday at the Morgan Stanley Technology, Media & Telecom Conference in San Francisco.

NBCU's Peacock is on track for an initial launch to Comcast's X1 and Flex customers in April, followed by a national launch in July. Comcast/NBCU expects to spend about $2 billion in Peacock's first two years and to reach profitability by year five.

"We have big plans for streaming in 2020," Roberts said, reiterating that Sky's technology will be powering the Peacock streaming service.

Meanwhile, launching broadband in Italy is a "priority" for Sky, as is the accelerated deployment the OTT-capable Sky Q video platform, which, the company believes, will help to reduce video service churn and drive up video ARPU.

Other significant investment areas for 2020 include a new theme park being built in Beijing, China, set for a May 2021 opening, as well as the ongoing development of a new Epic Universe park that will double the Universal parks' footprint in Orlando when it opens in 2023.

Broadband still clicking
Meanwhile, broadband connectivity has become the bread and butter business for Comcast's cable unit. Comcast tacked on 1.4 million net adds in 2019 and is off to a "fast start" through the first part of 2020, Roberts said.

And that growth is continuing despite a market that is more than 80% penetrated. "Broadband keeps reinventing itself," Roberts said, noting that the focus is no longer solely focused on speeds and speed upgrades but WiFi/home network management systems like xFi that drive more value into the baseline product. "I am optimistic that we have a long runway [for broadband]," he added.

Roberts is also optimistic about Xfinity Flex, a streaming/smart home product that Comcast is offering for free to broadband-only customers. Comcast hasn't announced how many subs are on Flex, but Roberts said the company is deploying more Flex boxes than it is losing video subs (Comcast lost 133,000 pay-TV subs in Q4 2019 alone).

"It's a great long-term investment in the home," he said.

Coronavirus concerns
Roberts also addressed questions about how the new coronavirus (COVID-19) is impacting Comcast.

"Our base business is, at the moment, kind of unaffected," Roberts said. "With 70% of our company being cable and broadband, and that consumption taking place in the home. We're in a very good set of businesses that actually can see more improvement in our digital service and using your device to transact with our company. It could actually accelerate trends that we're already having."

However, Comcast will absorb a financial blow in Japan after NBCU was forced to close its Universal Studios theme park in Osaka for a couple of weeks (NBCU expects that closure to result in a revenue decline of 7% to 9%). Construction of a new park in Beijing, China, slated for a May 2021 opening, was also disrupted temporarily for several weeks. However, work is underway again there and NBCU still expects that park to open on time, he said.

Roberts is also mindful of how the spread of COVID-19 might affect the Summer Olympics set for Tokyo and NBCU's plans to cover the event. "As far as I know, it's full steam ahead," Roberts said, noting that NBCU and Comcast are adequately insured and otherwise insulated from a business standpoint in any case. "We're optimistic that the Olympics are going to happen."

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— Jeff Baumgartner, Senior Editor, Light Reading

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