Comcast is not a cable operator anymore. Rather, it's a connectivity provider that's leveraging its vast broadband portfolio to serve the merging needs of consumers and enterprises across its national footprint, according to Comcast Chairman and CEO Brian Roberts.
Speaking at the recent Goldman Sachs 27th Annual Communacopia Conference in New York, Roberts discussed how the giant US MSO has pivoted from being a cable operator into a communications company -- and the rich financial benefits it's reaping as a result. In the past 12 months, for example, Comcast added 800,000 new customers and became more agile, even as it grew. (See Comcast Sees Broadband Nirvana.) "We are growing the core of the company," he told Goldman Sachs analyst Brett Feldman, who conducted the on-stage interview. "We are doing that by having added a 1.2 million broadband relationships in the last year. We've used this last period of time to really pivot internally, and hopefully for investors, to how we define ourselves. We now have said we're in the connectivity business, rather than the traditional cable side of the company."
Of course, Comcast still firmly retains its cable services foothold and is deploying DOCSIS 3.1 infrastructure, including DOCSIS Full Duplex assets that will allow it to launch multi-gigabit services throughout its existing network. But it also has fiber-optic cable, underwater cables, satellite and a whole smorgasbord of broadband and connectivity technologies via any combination of fixed, wireless and WiFi.
Whereas Comcast had spent a lot of its resources on video -- buying Universal, for example -- Roberts himself was embarrassed on trips to New York by the region's lack of certain Comcast amenities, such as its voice-operated remote. The company moved the video team responsible for developing some of its more leading edge solutions onto broadband, Roberts said.
"We've taken that team … and said what can we do in broadband in the next few years with that same innovation?" he said. "… we've sort of internally adopted a strategy we're calling Broadband 2.0. And it starts with speed, and you talk about WiFi speed, talk about the gateway and giving you better speed than anybody else. And you want that to be able to continue -- which it will -- and improve every year as we've increased speeds every year for 20 years."
"That is all you have to do. No password, no typing it in, no log-on. It just works. We sell them in four-packs, three-packs, six-packs; we're going to give them away to our best customers," he said. "We're looking at different marketing ways and we're calling [them] xFi Pods."
Comcast tackled control, a concern for some parents, via the ability to easily turn WiFi off and on, said Roberts. And capacity -- in this time of streaming video, multi-generation households, gaming and Internet of Things -- is not a major consumer issue yet but is a big concern for providers, Roberts noted.
About one-tenth of Comcast residential subscribers -- the "power users" -- consume at least 600 Gbit/s each month, 90 times the capacity of the average wireless customer, he said.
"And it's triple where our average customers are today," Roberts continued. "So, if you basically say, they're the early adopters and that we're all headed to where the power users are today, five years from today looks like everybody else, and they're somewhere down the road further with the innovation that's going to still come."
With continued development in IoT, including among verticals and businesses, capacity retains a key position on Comcast's roadmap. Fiber, its network, its hunger and ability to invest are all central to the operator's ability to continue expanding capacity, he said. Boosting margins Comcast is improving revenue, in part, by moving away from unprofitable video customers, according to Roberts. These moves include greater automation, cutting tech support calls and truck rolls by improving customer experience. It also includes removing some customer premises equipment and replacing it with white box or cloud-based systems to slash expenses. Indeed, 75% of all customer interactions are now digital, Roberts said.
"We now need your cell phone or your email to do business with us on a go-forward basis. When you start with a totally different mindset from 50 years ago, which is, here is my phone number, call me," he said. "How do we transform our company and yet do so in a way that for those who still want to do business with us the old way, you're providing a better and better experience. All of that transformation is taking costs and operating costs out of our transactions. And that is the part of why the margins coupled with longer term -- medium-term programming agreements that those initial pumps have now mitigated, put all that together and you're getting [good] results."
Related posts:
— Alison Diana, Editor, Broadband World News. Follow us on Twitter or @alisoncdiana.
