King Comcast: MSO Paints Rosy Picture for Analysts, Investors

Not surprisingly, chmn/CEO Brian Roberts continued gushing over Comcast‘s health at the MSO’s analyst/investor meeting Tues, and why not? Recent quarterly performances have been stellar, and guidance for ’07-’09 includes a 12% CAGR in revenue, a 14% CAGR in OCF and 7mln annual RGU adds. But even as obstacles to such robust success do exist—with increasing competition, swelling capex and forecasts of few basic video adds chief among them—they remain obstructed by new commercial opportunities and ravishing triple play metrics. The SMB market provides ample "low hanging fruit," said Roberts, and plenty of upside. Comcast believes the ripest to be businesses with fewer than 20 employees, which alone offer a $12- $15 annual rev potential. This commercial "sweet spot" will drive the MSO’s commercial goals of 10-fold growth over the next 5 years, said business services pres Bill Stemper. And concerted efforts to leverage localism and its 90K employee base to drive growth may deliver yet another segment target. "We can create a Fortune 600 company that will only get larger and larger," said Stemper. Meanwhile a steady expansion of triple play adherents is not only predicted but expected, with digital voice and HSD to be the primary catalysts. Comcast foresees more than 17mln HSD subs and 11mln voice subs by ’09, additions that are expected to beget a 40% triple play adoption rate within 3 years, up from an expected 16% at year’s end. Roberts is so enamored of the 3-play bundle that he downplayed the importance of adding wireless to the mix. "I think we are maxed out [right now] with the triple play, but we are delighted to be part of the Sprint jv," he said. The ability to sustain the bundle hinges on continued growth of its "flagship" HSD product, efficiency maximization through gambits such as enabling more self-installations and upgrades, and improvements in HD quality and breadth of HD offerings, said evp, cable operations, Dave Watson. Comcast plans to double the amount if its HD content this year, and double it again in ’08. Also in the works is caller ID functioning that works across all services. "There will be more acceleration across all platforms over the next 18 months than ever before," said Watson. That should keep Roberts smiling.