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Watson Won’t Disrupt Comcast Momentum

Making his debut before analysts as Comcast Cable’s new CEO Thursday, Dave Watson pledged not to tinker with the pay TV juggernaut’s momentum, focusing his efforts on profitable growth, innovative products and services and constantly improving customer service.

Watson, who has been with Comcast since 1991, became CEO of the cable unit on April 1, after former CEO Neil Smit transitioned from day-to-day operations to vice chairman of Comcast Corp. Watson had most recently been chief operating officer under Smit, so the transition he said, was no major undertaking.

“I’ve been working with Neil on our strategy for awhile,” Watson said on a conference call with analysts to discuss first quarter results. “It’s no great surprise that I’m going to stay focused on what’s working.”

Watson takes the cable helm at a critical point for Comcast – it is launching a new wireless product, called Xfinity Mobile, and pay TV operators are facing a growing potential competitive onslaught from virtual MVPDs, 5G wireless and skinny bundles.

Watson doesn’t appear to want to take Comcast in a radical direction. On the call he said he would focus on profitable growth areas including business services, innovative products and customer service. On the customer service front, he said his goal is to take the customer experience to the next level, focusing on key moments such as when existing customers move or new ones come onboard.

“There is some real traction around that,” Watson said. “It’s good for customers and I think this is the right way to drive healthy and sustainable efficiencies.”

Watson said on a personal note, he will miss working closely with Smit.

“He was a great partner and a great boss,” Watson said. “However, I am excited about this next chapter and with a very good cable team, we are going to go after the opportunities in front of us.”

And one of the biggest opportunities is wireless.

Earlier this month Comcast unveiled its long awaited wireless service – Xfinity Mobile – taking advantage of its existing MVNO agreement with Verizon Communications. Currently in employee-only tests, the offering is expected to be available to customers throughout the footprint later in the year.

This isn’t Comcast’s first attempt at a wireless play. The company sold its Comcast Cellular business, which Watson formerly headed before joining the cable operation, in the 1990s and other subsequent wireless partnerships have failed. But Comcast chairman and CEO Brian Roberts said he had no regrets.

“The question of where wireless is, where it’s going, I think we’ve done a really good job of making sure that product is in our bundle,” Roberts said. “It’s going to be a fabulous value for customers with the brand new product.”

Roberts pointed out some of the more attractive features of the product – the combination of the cellular and Wifi networks, the ability to access Xfinity services by logging in just once and flexible packaging that allows customers to buy unlimited plans or pay only for the Gigabits they use.

“That gives us what we need,” Roberts said. “We are always looking at where future technologies are going and things of that nature, but right now we look at our results today compared to anything we’ve seen, I couldn’t be more pleased with the portfolio of our company and the trajectory we’re on.”

Other competitors like AT&T and Verizon have set the wheels in motion for the next generation of wireless technology – 5G – but Watson said Comcast is in no rush to follow them.

“The main thing about 5G is that it’s early,” Watson said. “We’ve been through this before. There are really promising aspects of new technologies, but it takes time to scale. While there may be early-stage applications of something like 5G, we compete today with microwave applications to MDUs and dense urban areas. We’re going to stay close to it, we’re testing some fixed mobile aspects of it. The main question for 5G for us is with its higher frequency range, can it broadly, reliably and economically deliver fixed wireless broadband? I don’t believe at this stage at all that it’s a significant threat on the wireless fixed broadband side.”

In the meantime, he said Comcast is not standing still, adding that DOSCIS 3.1will be available to about 65% of its footprint by the end of the year.