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Comcast Can't Be Beat on Broadband

Mari Silbey
4/27/2016
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Comcast is a broadband behemoth.

After reporting the addition of 438,000 new subscribers in the first quarter, the cable company now has 23.8 million Internet customers in total. That's a jump of nearly 2 million Internet subscribers in two years.

In comparison, AT&T Inc. (NYSE: T) currently has 14.3 million Internet customers, and Verizon has 9.2 million. Assuming Charter Communications Inc. successfully acquires Time Warner Cable Inc. (NYSE: TWC) and Bright House Networks , New Charter is projected to have 19.4 million Internet subscribers.

Part of Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s success undoubtedly comes from the fact that it delivers higher average speed tiers than many of its competitors. The company said that 77% of its Internet customers receive speeds of at least 50 Mbit/s.

Internet service revenue also grew in the first quarter, reaching $3.3 billion, up from $3 billion a year ago and $3.2 billion last quarter.

For Comcast's cable business as a whole, revenue increased to $12.2 billion in Q1 from $11.4 billion in the year-ago quarter and $12 billion in Q4. Total revenue, including the contribution from NBCUniversal LLC , rang in at $18.8 billion compared to $18.1 billion a year ago and $19.4 billion last quarter.


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Comcast also reported positive results for its cable video business, driven at least in part by the company's broadband strength. Comcast and its customers benefit from being able to bundle broadband and video services, although there are concerns that the cable company could use this advantage to muscle other standalone video competitors out of the market. Comcast gained 53,000 video subscribers in the first quarter after losing 36,000 for full-year 2015. This is the second quarter in a row that the cable operator has added video subs, bringing Comcast's total number of video customers to 22.4 million.

Of note in Comcast's video results, the company reported that nearly 35% of all video customers now have the X1 platform. Comcast has increased its capital spending in part to deploy more advanced X1 gateways, but that investment is paying off in higher per-subscriber revenues and reduced video customer churn.

Comcast's latest earnings results come amid reports that the company is considering buying DreamWorks LLC for upwards of $3 billion. (See Comcast Sniffing Around DreamWorks – Report.)

At the end of last quarter Comcast CEO Brian Roberts largely scoffed at any near-term acquisition activity saying "I really like the company we have right now." (See Comcast Earnings: A Study in Contradictions.)

Comcast declined to comment on the Dreamworks rumor in today's earnings call.

Reporting on the company's commercial services business, Comcast stated that revenue increased 17.5% from the year-ago quarter to $1.3 billion. Year-over-year growth rates have slowed somewhat, with yearly percentage increases down from 18.7%, 19.5% and 20.3% in the previous three quarters. Small business customers account for roughly 75% of commercial services revenue and roughly 60% of growth.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

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kq4ym
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kq4ym,
User Rank: Light Sabre
5/10/2016 | 2:41:15 PM
Re: Overbuilding
I'm skeptical that "success undoubtedly comes from the fact that it delivers higher average speed." It if were simply high speeds everyone would be taking that road to success, and I wonder how much it advertising and marketing clout has in becoming so huge.
kq4ym
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kq4ym,
User Rank: Light Sabre
5/3/2016 | 10:57:30 AM
Re: Can't be beat...except not
It will be interesting to watch Comcast's video segment. It seems to me the X1 product is pretty pricey for lots of folks although it certainly does offer the gee whiz factor for customers into all kinds of high end video tech magic
jbtombes
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jbtombes,
User Rank: Light Sabre
4/29/2016 | 9:07:18 AM
Re: Can't be beat...except not
Dubious numbers, j9z. CMSCA overall had $7.4b capex in 2014. That's somehow equivalent to what T spent in Florida? You're talking Uverse alone? Happy to stand corrected if you have hard data.
j9z
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j9z,
User Rank: Light Beer
4/27/2016 | 10:48:09 PM
Can't be beat...except not
Comcast's investment in infrastructure has been pitiful.  Their 2014 country-wide spending was equal to that which AT&T invested into Florida, alone.  Funny how you have no statistics for uptime.  It's about 97% by the way, which doesn't sound bad until it's affecting you.  I don't see any plans to Six Sigma that either.  Comcast can brag all they want but they ignore everything that matters. 
Stillgridlocked
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Stillgridlocked,
User Rank: Moderator
4/27/2016 | 5:20:53 PM
Overbuilding
I'd love to see them overbuild in Rhode Island but cable co's won't compete against each other.  RCN, FIOS and Uverse aside.
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