Comcast Rides Broadband Wagon Again

Like most of its cable peers, Comcast just can't get enough of broadband these days.

Jumping on the broadband wagon for yet another earnings cycle, Comcast reported healthy increases in high-speed Internet subscribers, revenue and other key operating and financial metrics for the second quarter. It also revealed a few more details about its plans to leverage that broadband network to launch a streaming video service from its NBCUniversal unit next spring.

Comcast, by far the largest broadband provider in the US, netted 209,000 new data subscribers (182,000 residential and 28,000 business) in the spring quarter, boosting its total broadband base to 27.8 million by the end of June. Although that figure is off from its gain of 260,000 broadband subs 12 months earlier, the year-ago total marked the company's best-ever broadband quarter. With DOCSIS 3.1 fully rolled out throughout its footprint and 1-gig service now available ubiquitously, Comcast executives stressed the operator is well on its way to a 14th consecutive year of 1 million-plus broadband sub increases.

Due largely to these gains, Comcast's broadband revenue surged 9.4% to $4.66 billion in the quarter. Plus residential broadband ARPU (average revue per unit) rose 4.2% year-over-year, as fewer bundling discounts and more subscriber upgrades to higher-priced speed tiers lifted revenue -- without price hikes.

"The ARPU is growing, broadband revenue is growing, and it's margin accretive, so it's helping the EBITDA growth," said Comcast Cable President and CEO Dave Watson, in the MSO's Q2 earnings call. "So overall, I think we have a solid pipeline for broadband innovation."

On the wireless front, Comcast's Xfinity Mobile service continued its steady, if slightly slower, ascent to profitability. The MSO added 181,000 mobile lines in Q2, raising its total to nearly 1.6 million lines. Spring's mobile line gains were off from adds of 204,000 lines in the year-ago period but up from adds of 170,000 lines in Q1.

As a result, Comcast's mobile revenue rose 21%, to $244 million. Operating cash flow from Comcast's mobile business improved as well to $88 million, down substantially from a year earlier, as the new unit edges ever closer to profitability.

Comcast officials still had no early results to share about Xfinity Flex, a new video streaming product for broadband-only customers that's powered by the MSO's cloud-based X1 platform (including the X1 voice-based navigation and search system) and integrated with OTT offerings like Netflix, Amazon Prime Video and YouTube. But executives said more information will come soon.

"It's an important long-term product," Watson said Flex on the company's Q1 earnings call in April, noting it's early use in a "targeted fashion" to build a broader video relationship with the operator's broadband-only subs. "We think Internet-delivered video is a good thing for the cable business."

Also on the streaming video front, Comcast executives revealed a bit more about the forthcoming OTT-delivered video service from the conglomerate's NBCUniveral (NBCU) unit. Plans call for the offering, to be based on the existing Now TV platform of Comcast's Sky service in Europe, to launch in April.

The new ad-supported service mainly will feature acquired movies and TV shows, rather than exclusive originals, at least at first, said NBCU CEO Steve Burke. Despite a market crowded with incumbents like Netflix and Amazon, as well as such new entrants as Disney, WarnerMedia and Apple, Burke is not worried, he said, in a statement.

"Our service is very different from Netflix," said Burke. "We believe we've got some ideas that are innovative and don't really want to share those until we get right close to launch, but we're very pleased to have The Office and very optimistic about our streaming plans at this point."

For more on Comcast's second-quarter earnings, please turn to our sister site, Light Reading. (See Comcast Broadband, Mobile Growth Engines Keep Purring.)

Related posts:

• Rogers Aims to Ignite Broadband Growth
• DOCSIS 3.1 Gains New Ground
• Comcast xFi: From Remote Control to Smart-Home Hub

— Alan Breznick, Cable/Video Practice Leader, Light Reading