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Comcast CFO: Company happy with current portfolio but open to deals

With more than 1 million net broadband subscriber additions on tap for 2017, Comcast Corp. expects to exceed the seven-figure mark again with the high-margin business in 2018, Senior Executive Vice President and CFO Michael Cavanagh said during a Dec. 4 keynote address at UBS Global Media and Communications Conference in Manhattan.

Relative to reports that Comcast is among the companies interested in purchasing some of 21st Century Fox Inc. assets, notably the company’s movie and TV studios, its stake in Sky plc and India's Star TV, and some U.S. cable networks, Cavanagh sidestepped the issue directly. “For us, we've said repeatedly … We really like the collection of businesses that we have. We think they're performing well with tremendous momentum, great management teams, lots of opportunities to continue to drive growth in these businesses. And so we're quite optimistic about the portfolio we have, and we don't see a strategic gap that would require us to go fix a strategic deficit in any way.”

Having said that, Cavanagh noted that “it’s our job to evaluate and consider and see if despite the fact that there is not a strategic necessity, are there things out there that we could do that would create value for shareholders. Walt Disney Co. is reportedly back at the negotiating table to buy some of Fox's assets.

On net customer additions, Cavanagh said “it looks like we'll be well ahead of 1.1 million net adds, which means the fourth quarter net adds for high-speed data will be well ahead of [what] consensus expectations are as we speak," citing three main reasons why the run will continue in 2018 and beyond.

Calling broadband “the enabling technology and product” in a streaming world, Cavanagh said that with 80% of homes having some form of Internet service and Comcast’s penetration level at 45% within its footprint, there is still significant runway ahead. “We think there's opportunity for just deeper penetration of the existing national footprint and particularly in our footprint,” he said.

He also cited new home formation within Comcast territories: “We think we'll get our fair share of that.”

Market share amelioration represents the third bucket. Cavanagh said Comcast is investing in broadband in the same way it has with its X1 operating system. “Whether it's the speeds with DOCSIS 3.1 coming out, product capability in terms of the best gateways, our new gateways, XD6 and the early ones, XP3, the fastest ability to deliver Wi-Fi, combined with the pods, X5 pods that we have, gives us great coverage, automatic connection and great coverage of Wi-Fi in the home,” he explained, adding the company is also offering innovative capabilities allowing subscribers to control how Wi-Fi is used in their residences, to monitor the connections to new devices and the Internet of things in the home.

As to Xfinity Mobile that was launched in August, leveraging Comcast's network of Wi-Fi hotspots and its mobile virtual network operator agreement with Verizon Communications Inc., Cavanagh said “we’re on track broadly.” He reminded UBS conference attendees that on its third-quarter earnings call, Comcast said it had added 250,000 lines, “and it’s continued on a good pace since then.”

Acknowledging that it’s early days, he said Comcast is “very pleased” with Xfinity Mobile. “The message is resonating with our customers. Again, it's a — combination of what we already do for customers in a bundle with the ability to bring the great devices and a great wireless network at a price point that allows most families or most customers of ours to save money in aggregate on their wireless side. And we've given the choice between to buy the 1 Gig and the unlimited approach pricing approach, that's really resonated well in the marketplace.”