Comcast issued its Q4 05 earnings this morning showing strong growth in all new services and a reversal in its basic customer loss. Total revenue generating units climbed to 41.1 mil., up from 40.2 mil. in Q3 05 and 38.4 mil. in Q4 04, thanks to healthy growth across the board in video, high-speed and, to a lesser degree, voice customers (during much of 2005 Comcast was eliminating its circuit-switched voice business as it geared up for VoIP).
During the earnings call, President Steve Burke focused only on Comcast’s imminent massive VoIP launches. During late-2005, Comcast launched 26 markets with VoIP services — toward the tail-end of the year Comcast was adding 10,000 new voice customers per week and during the first few weeks of 2006 that run-rate ramped up to 14,000 to 15,000 new voice customers per week. While the big campaign to roll out VoIP didn’t really start until late in the year, Comcast added 79K net new VoIP customers during Q4 05, a growth rate that towers over the 12K it added in Q3 05 and the 10K added in Q4 04. (See table at end).
“In 2005 we really laid the foundation for the growth we’ll experience in 2006,” Burke said. “We’re ready now to concentrate on the phone roll out.”
Comcast has so many competitive advantages over its rivals, Burke stressed, with the company able to offer triple-play services to 25 million homes. Telcos can only reach 1% of Comcast’s customer base with triple-play offerings, according to company estimates.
The goal is to sell voice-video-data packages to the twenty million homes in Comcast’s territory that don’t buy anything from the company. Therefore, Comcast will be targeting a $99/month (at least for one year) package to non-subscribing homes as it rolls out triple-play services.
Indeed, Comcast seems to be aiming for a lot of growth in non-subscribing or low-end homes generally. CEO Brian Roberts said during the call that Comcast’s “enhanced basic” push, which gives a low-end digital box to all customers regardless of whether they buy digital service or not, will get services such as VOD into homes that don’t buy a lot of services from Comcast.
“Our strategy is to take that product [digital] through the enhanced cable and make some version of it available to most of our 22 million customers,” he said. But, the company is also poised to push services to non-subscribing homes. “We hope the power of that bundle will allow us to extend our relationships into more of those homes [non-Comcast customers] in the years ahead,” Roberts said.
| Comcast Voice Service Metrics (000) | |||||
| 4Q04 | 1Q05 | 2Q05 | 3Q05 | 4Q05 | |
| Marketable Homes Passed | 10,437 | 11,277 | 12,227 | 16,524 | 21,378 |
| Subscribers | 1,223 | 1,228 | 1,230 | 1,242 | 1,321 |
| Penetration | 11.7% | 10.9% | 10.1% | 7.5% | 6.2% |
| Quarterly Net Sub. Additions | 10 | 4 | 3 | 12 | 79 |
| Monthly Average Rev./Customer | $47.30 | $47.07 | $46.06 | $46.03 | $45.19 |
| Emerging Media Dynamics analysis of company data © 2006. | |||||
| *includes legacy circuit-switched and new VoIP services. | |||||
Cynthia Brumfield at 9:39 AM|Comments(0)
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