Comcast co-chief financial officer John Alchin couldn’t say much about the nation’s largest cable operator’s participation in the Federal Communications Commission wireless auctions, but he added that there is no intention to become a cellular carrier in competition with Sprint Nextel, Cingular Wireless, T-Mobile USA or AT&T Wireless.
Comcast is a partner in SpectrumCo, a group that includes Time Warner, Cox Communications and Advance/Newhouse Communications.
Through 118 rounds of the auction -- which commenced Aug. 9 -- SpectrumCo has bid $2.4 billion and has 113 provisionally wining bids for markets such as Los Angeles; Chicago; Washington, D.C.; and Dallas.
Speaking at the Merrill Lynch Media & Entertainment Conference in Pasadena, Calif., Tuesday, Alchin said FCC anti-collusion rules prohibit auction participants from speaking about their strategies surrounding the auction while it is ongoing and for at least two weeks after the auction has closed.
“Any spectrum that we acquire really provides us with long-term flexibility and many strategic options that wouldn’t be otherwise available to us,” Alchin said at the conference. “We have no interest in being the fifth cellular operator.”
Alchin added that Comcast will likely test integrating wireless functionality enabled through the increased spectrum in certain markets into the other platforms the MSO has, perhaps in conjunction with its Sprint Nextel joint venture (which also includes the other partners in SpectrumCo).
“This is all about giving us long-term strategic options while remaining very, very involved in the Sprint JV that we have now,” Alchin said.
Alchin reiterated Comcast’s plans to launch a wireless product as part of the Sprint JV in two markets -- Portland, Ore., and Boston -- by the end of the year.
Separately, Alchin said Comcast sees no major acquisitions on the horizon, adding that after the Adelphia Communications joint purchase with Time Warner -- which netted Comcast about 2 million subscribers -- the operator has sufficient scale.
Alchin added that besides unwinding its 50-50 JV with Insight Communications -- which, he said, could be resolved early next year -- there aren’t that many deals left.
Comcast has had the right to unwind the Insight partnership since Dec. 31, 2005. Once that deal is done, Comcast could end up with one-half of Insight’s 1.3 million subscribers.
“We will be, with the resolution of the Insight partnership, at about 25 million basic subscribers and well over 45 million RGUs [revenue-generating units],” Alchin said. “We think that gives us all of the scale and scope you need to have in this marketplace.”
Comcast senior vice president of product development Dave Juliano also made a presentation at the conference, adding that the robust growth in high-speed-Internet subscribers will not be adversely affected by falling prices for digital-subscriber-line services from telcos.
Comcast has been able to maintain its $42-per-month price point for high-speed-Internet service, even as DSL has dipped to as low as $13. Juliano said he views DSL service as a step between dial-up and cable-modem service.
“It’s like moving from eight-track to cassette,” Juliano said, adding that Comcast has marketed its high-speed service as superior to DSL.
“We’ve always been positioned to say that DSL at best is a step between dial-up and your ultimate destination,” he added. “We are building aspiration for high-speed Internet. This is the beginning of the triple play. There are other triple-play bundles we can create. Frankly, this lets us address the fundamental value proposition to customers without cutting price. It’s one of the best things about triple play. We think we’re positioned to continue to grow the high-speed-Internet business for the foreseeable future.”
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