Comcast is more focused on increasing revenue from its broadband products than growing out its customer base from those services, the CEO of the company’s cable business said at an investor conference this week.
Speaking at the J.P. Morgan Tech & Media Conference on Tuesday, the CEO of Comcast’s cable business David Watson acknowledged the company is facing increased competition from upstart products like fixed-wireless and satellite-delivered broadband services.
“This is probably the most competitive broadband environment that I’ve seen,” Watson remarked on Tuesday. “But, yet, we grew broadband revenue 4 percent, so there’s a good balance of between the volume and rate that we’ve been focused on.”
The figure was based on Comcast’s first quarter (Q1) earnings for 2024, which saw the company bring in $6.591 billion off the back of its residential and enterprise broadband products. Revenue continues to come in, despite Comcast losing broadband customers to other services during the first three months of the year. The company lost 65,000 residential and small business broadband customers during Q1, according to financial data released in April.
Broadband has become a bigger part of Comcast’s overall focus as price-conscious consumers move away from its other core product, pay TV. Higher programming costs associated with delivering broadcast channels and cable networks has spurred a trend known as “cord-cutting,” with Comcast losing 487,000 pay TV customers during Q1.
For those reasons, Comcast is increasingly looking at ways of delivering more value to prospective and existing customers, especially those that require broadband Internet. On Tuesday, Comcast unveiled a new streaming bundle called “Stream Saver” (stylized as “StreamSaver”) that offers Apple TV Plus and the ad-supported tiers of Netflix and Peacock for $15 per month. The bundle offers a discount of around 30 percent compared to what each service would cost on its own, but customers can only buy Stream Saver if they already have Xfinity TV or Xfinity Internet.
“One of the most-important things we acknowledge, and are a champion of, quite frankly, is broadband consumption applications,” Watson affirmed. In other words, Comcast finds Internet-heavy applications, like streaming video services, as an attractive offering that complement its high-speed Internet plans.
Those Internet-heavy applications are driving interest in higher-speed tiers of service, Watson said. During the first three months of the year, the majority of Comcast’s new customers — 70 percent of them — opted for high speed data plans that offered download speeds of at least 500 megabits per second (Mbps), Watson affirmed. One-third of Comcast’s new customers opted for Gig-speed Internet packages that offer 1 gigabit per second (Gbps) download speeds.
Comcast has relatively few pure-fiber broadband products. Throughout most of its service footprint, Comcast provides broadband Internet service using a “hybrid fiber-coax network,” which combines a fiber-optic backhaul with the existing coaxial wiring leading to and already inside customer homes and businesses.
Like other cable service providers, Comcast uses the DOCSIS standard for transferring data over cable connections. Many areas served by Comcast have been upgraded to DOCSIS 3.1, which brings download speeds of 10 Gbps and upload speeds of over 1 Gbps within reach. Around 40 percent of Comcast’s serviceable area is ready to receive service through DOCSIS 4.0, which would allow the company to offer even faster connections and symmetrical download-upload speeds.
By comparison, many pure fiber providers, including AT&T Fiber and Verizon Fios, already offer faster connections and symmetrical download-upload speeds. Some smaller, regional cable service providers that have made the transition to DOCSIS 4.0 are also marketing symmetrical speeds to their customers as an advantage over other services.
“We like where we are, we’re not holding back one bit,” Watson said, while acknowledging that “the main long-term competitor for us, and the reason why I think we’re in a really good position…is fiber.”
“We’ve gone up against fiber for a very long period of time,” Watson noted. “I think we have a good roadmap to how to compete, but investing in the network the right way…the strategy will define capital intensity.”
Watson said Comcast is not just leaning on network upgrades to drive higher revenues: Service bundles are an important element, too. In addition to Stream Saver, Comcast is working to put its Xfinity Mobile product in front of more broadband subscribers. The wireless product offers unlimited talk and texting on Verizon’s 4G LTE and 5G networks, with prices dependent upon how much data a customer is willing to pay for (unlimited data plans are available).
Comcast also refreshed its low-cost service offerings and incorporated them under the Now branding as a way to reach more price-conscious consumers who want no-frills service options without significant costs.
