With its wireless offering expected to be launched by mid-year, Comcast chairman and CEO Brian Roberts offered some details regarding his expectations for the product to an industry audience Monday night, adding that not only should the service be profitable for the cable operator, but should save its customers money too.
Comcast activated its Mobile Virtual Network Operator [MVNO] agreement with Verizon Communications in October, and set up its own Comcast Mobile division to manage the product in July. The company has offered few details on what the product would be, only that it will be launched as part of a bundled service by the middle of this year.
At the Morgan Stanley Technology, Media & Telecom conference in San Francisco Monday, Roberts offered a glimpse into what he hopes Comcast will get out of the service.
Roberts said the goals are simple: to make money on wireless as a standalone, it should help reduce churn and it should help customers save money.
“The product itself is going to save you money by taking our bundle.,” Roberts said. “And third is, we’re going to sell more products, not including wireless, but broadband, as a result of this offering.”
Selling more products has been the mantra for years at Comcast, and in 2016 it managed to sell more video for the first time in a decade, ending the year with 161,000 more basic video subscribers than it started with. Roberts said the path toward positive video subscriber growth was paved with better products, like its X1 platform, faster data speeds – it has increased broadband speeds 14 times in the past 12 years – and improving reliability and customer service.
“If your product is better than your competition, in the fullness of time, I think that’s how you win,” Roberts said. “We haven’t always been in a position where I could say those words.”
Roberts added that a focus on improved customer service and it robust network should help ensure that Comcast stays on top.
“We’re getting ready for a day when you have a smart music system, a smart refrigerator, smart devices and they all just work in their home,” Roberts said. “Hopefully the bits per home continue to rise and the company with the best network, defined as wired and wireless, will have a real advantage.”
Roberts also touched on Comcast’s NBC Universal programming unit, adding that while others are beginning to see the benefits of vertically integrating distribution and content – especially in the wake of AT&T’s $108.7 billion offer for Time Warner Inc. – Comcast is already reaping the benefits. For example, when Comcast first gained control of NBCU, it had zero retransmission consent revenue. That figure grew to about $800 million last year and is expected to climb to $1.4 billion this year, Affiliate fees for its cable channels are also on the rise, although he admitted that growth has slowed for all programmers.
But Roberts said he sees no reason for Comcast to pursue any big deals at least for the moment.
Comcast has not been shy when it comes to acquisitions – it paid about $3.8 billion for DreamWorks Animation last year and had earlier pursued the Walt Disney Co. and Time Warner Cable but decided to abandon those efforts.
Roberts said Comcast will focus on rolling out its X1 service – already in 50% of its homes with a goal to reach 60% by year-end. The company earlier announced that it would buy back about $5 billion worth of its stock and raise its dividend 15% this year as well, which should keep it busy.
“I think we’re returning a large amount of capital to shareholders while minding the store and innovating. That then says is there anything that you need to buy? We don’t think so.” Roberts said.
