Cable Technology Feature Article
February 18, 2009
Comcast 4Q: Better than Expected
By Gary Kim, Contributing Editor
Comcast's (News - Alert) fourth-quarter 2008 results show about what one would expect: continued revenue growth, continued loss of basic video customers due to competition from telco and satellite providers. Digital video customer growth seems to have continued at about a 10-percent clip, but it is unclear how much of that growth is net growth of enhanced services, and how much is from conversion of former "enhanced basic" customers to "digital" accounts.
But fourth-quarter results also were better than many might have expected. To wit, though one expects average revenue per user to suffer, Comcast grew ARPU.
Competitive pressure in the legacy video customer area likely is responsible for a net loss of 233,000 video customers during the fourth quarter. But high-speed broadband net additions were up 184,000, about 10 percent.
Comcast continued to add voice customers at a robust clip, gaining a net 344,000 customers, for a 45 percent growth rate.
Inevitably, some observers are going to say "the recession did it" when pointing to any sluggishess. There may be some truth there, but the overarching argument makes about as much sense as that the recession is causing telcos to lose voice lines. Those losses--basic cable customers on the part of cable companies and voice lines on the part of telcos--reflect larger competitive dynamics that were occurring long before the recession and will continue even after the recession is history.
The other notable point is that the recession might be affecting consumer behavior as it typically does--retarding adoption of enhanced features--but is not crimping growth. Revenue at Comcast grew 11 percent during the fourth quarter.
On the other hand, free cash flow shrunk 11 percent, another not-unexpected result of operating in a tougher environment.
And though lower average revenue per customer frequently occurs during recessions, Comcast actually managed to grow ARPU nine percent.
Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.
Edited by Tim Gray