Still going all out with DOCSIS 3.1 rollouts, Comcast said it now offers 1 Gig broadband speeds to about 80% of its footprint and will blanket its entire service territory by the end of the year.
Executives at Comcast Corp. (Nasdaq: CMCSA, CMCSK), which is both the largest cable operator and largest broadband provider in the US, confirmed on the company's fourth-quarter earnings call Wednesday morning that broadband has replaced video as their biggest cable priority. That's why they are scrambling to deploy DOCSIS 3.1 technology, which enables multi-gig download and upload speeds, and xFi advanced home gateways, which support 1 Gig home networking capabilities.
"While we're going to compete aggressively across the board for good video customers, we have transitioned more and more toward broadband," said Dave Watson, president and CEO of Comcast Cable, speaking on the earnings call. "We have transitioned more and more to broadband. Broadband is a centerpiece for us."
Although residential broadband penetration overall is now pretty high in the US, Comcast executive think they still have substantial room for growth. They noted that only 45% of the 50 million or so homes passed in Comcast's footprint now subscribe to the MSO's broadband service, leaving tens of millions of potential customers.
"The DSL base is still substantial," Watson said. With the cableco delivering higher speeds, improving the home networking experience, driving greater data usage and raising monthly service rates, he said, broadband offers almost limitless possibilities for both subscriber and revenue growth.
Comcast picked up 315,000 new residential broadband subs in the fourth quarter, boosting its gain for the full year to more than 1 million. While those numbers are down from the respective year-ago gains of 350,000 and over 1.2 million, they still represent substantial increases in a market where the overall growth pace has been slowing. Comcast closed out 2017 with 23.9 million residential data subscribers, widening its lead over AT&T Inc. (NYSE: T), the nation's second largest broadband provider.
That steadily growing broadband customer base is also moving up to higher speeds and consuming more data. Michael Cavanagh, the MSO's senior executive vice president and CFO, said about 75% of Comcast's residential data customers now subscribe to plans with speeds of 100 Mbit/s or more, compared to about 50% a year ago. He also noted that the median data usage by Comcast subs surged 48% on a year-over-year basis.
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Comcast executives did not disclose how many of their broadband customers are subscribing to 1 Gig speeds. No US MSO has revealed those figures yet.
Business customers are signing up for Comcast's broadband packages in droves as well. In its earnings report, the company said it added 32,000 commercial data customers in the fourth quarter and 132,000 over the entire year, boosting its customer base to just over 2 million. So, counting homes and businesses together, the MSO now has 25.9 million broadband customers.
Due largely to these gains, Comcast posted nearly $3.8 billion in broadband revenues for the fourth quarter, up 8.4% from nearly $3.5 billion in the year-earlier period. For the entire year, the MSO racked up almost $14.8 billion in data revenue, up 9.1% from more than $13.5 billion in 2016.
In other noteworthy statistics, Comcast ended last year with a $6.2 billion run rate in business services, up 12.7% from 2016. The revenue in the company's "other" category also rose, increasing 4.8% for the year to a total of $2.8 billion. Driving growth in "other" revenue were Xfinity Home sales and revenue from X1 licensing agreements.
Launched last May, Comcast's Xfinity Mobile service is still in the early stages of distribution. But the company said it finished 2017 with more than 380,000 customer lines, adding 180,000 of those lines in the fourth quarter. "We're off to a great start," Cavanaugh said. (See A Critical Review of Comcast's Capex Rise.)
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