How Comcast Reversed Course — and Grew Subs

While the rest of the telecom world was focusing on the potential of a Verizon- Charter merger (see story above), Comcast quietly made the case for the cable business, reporting fourth-quarter results that were, by subscriber metrics, its best in a decade.

Comcast ended the year with 161,000 more video subscribers than it started with, the first time the MSO has shown year-over-year basic-video customer growth since 2006. At the same time, the cable unit grew revenue by 6.6% for the year (7.1% for the quarter), while cash flow was up 5.6% annually and 6.4% for the three-month period.

Analysts had been expecting Comcast to deliver strong results, and the operator delivered. Quarterly video customers grew by 80,000 (beating analysts’ consensus estimates of 75,000 additions), while broadband growth continued with the addition of 385,000 subscribers, about even with consensus.

In a research note, Morgan Stanley media analyst Ben Swinburne wrote that with the continued strength of its X1 platform, he expects the subscriber growth to continue. Comcast finished the year with X1 penetration of about 50%, which should grow to more than 60% by the end of 2017.

Comcast chairman and CEO Brian Roberts also revealed on a conference call discussing results that the MSO plans to offer a much anticipated wireless product in mid-2017 as part of a larger bundle.

Roberts didn’t offer a lot of color on the product rollout, which comes as part of Comcast’s Mobile Virtual Network Operator (MVNO) agreement with Verizon. The MVNO deal was part of the Spectrum Co cable consortium’s sale of its wireless licenses to Verizon in 2011 (Comcast was a member).

Some analysts have speculated the wireless product could use Comcast’s own WiFi network and rely on Verizon’s for “roaming,” or when users travel outside Comcast territory.

“We’re going to take it very carefully,” Roberts said of the wireless launch.