Voices Carry: Comcast Takes the Wraps Off Phone Product

Comcast is talking up voice. CEO Brian Roberts yesterday told investors at a Smith Barney conference in Phoenix that the MSO will offer its "Digital Voice" VoIP to about 15mln people, across 20 markets, by the end of this year, with all 40mln of its subs targeted by the end of 2006. The cabler has 1K employees working on its phone product and has spent the better part of the last year testing and getting everything up to speed, from e911 to billing and customer care. As it is wont to do with product launches, Comcast will engage in what Roberts calls a "steady march" of deployments. "We’ll go node by node, get the entire machine ramped up," he said. "We are coming." While voice is clearly another shot across the bow at his telco and DBS rivals, Roberts is staying out of the cheap-and-dirty sandbox. Digital Voice is $39.95 per month when purchased with video and HSD, and about $54 a month on its own, well over Vonage’s $24.99 price tag. "We’re going to distinguish it from Vonage, which does not have quality of service and just goes out over the public Internet. It’s just a cheap phone," Roberts said. In contrast, Comcast hopes to win over subs with "5-9s" service-techie jargon signifying 99.999% reliability, or just 6 seconds of downtime per week—and features like caller ID on the TV, videophone and message forwarding. Friedman Billings Ramsey expects Comcast to add 215K voice subs this year, with revenue growth hovering around 30% in 2006. — Oppenheimer analyst Lawrence Harris said Arris would benefit from Comcast’s big VoIP rollout as it is the MSO’s main supplier of CMTS gear. The Comcast account is responsible for 17% of Arris sales and that number could go up to at least 25% once the phone business launches in earnest. So far, Wall St likes what it’s been hearing. Comcast shares closed up 66 cents (2%) to $33.23, while Verizon, SBC and BellSouth all dropped less than 1% each.