Sales of cable modem services are accelerating, said Brian Roberts, President and CEO of Comcast, speaking at the Goldman Sachs Communacopia XII Conference. Comcast is on track to add 1.6 million cable modem customers this calendar year, which would give it a total of 5.2 million subscribers by year's end. New customer additions in July-August 2003 were up by 30% compared to the same period in 2002. Penetration rates are in the 12-13% range, leaving significant room for subscriber growth. Roberts said the revenue opportunity for cable modem service remains consistent in the $40+ range. Roberts expects the high-speed data platform will scale to much higher data rates of 50 Mbps or more over time, as broadband applications continue to improve.
Roberts also said Comcast is "more bullish than ever" regarding VoIP but is not yet ready to announce its plans. The big question is not whether Comcast can offer residential VoIP, but whether it can make money with the service. Comcast will continue to test the technology and the business model in 2004. Right now, Roberts sees the biggest business opportunity in continued gains for cable modem and VOD services.
Some other highlights of his presentation include:
- Comcast is intently focused on the market opportunity for VOD, which Roberts describes as a "fantastic product and superior to a Tivo-type solution"
As cable plant upgrades are completed, Comcast expects a 50% decline in its CAPEX budgets over the three year period from 2002 to 2005. According to projections, this will lead to a corresponding and significant increase in free cash flow over the same period.
Comcast's' overall debt has declined from $34.8 billion in November 2002 to $26.7 billion as of June 2003.
