Roberts: Challenging ’07 Led To Strong 1Q Results
Pricing Adjustments To Bundled Voice, Video And Data Service Begins To Pay Dividends
By Mike Farrell -- Multichannel News, 5/14/2008 4:17:00 PM
Comcast chairman and CEO Brian Roberts told shareholders at the cable giant’s annual meeting in Philadelphia Wednesday that despite a difficult economic and competitive environment in 2007, Comcast has responded appropriately and has positioned the company for strong growth in the coming year.
Calling 2007 “a solid year in a challenging environment,” Roberts said that while a sluggish economy and stiffer competition contributed to that challenge, Comcast managed to hold its own that year and has responded in 2008 by focusing on the bundle of voice, video and data.
That was apparent in the first quarter ended March 31, where revenue rose 14% to $8.4 billion and cash flow increased 15% to $3.2 billion. Although Comcast lost about 57,000 basic subscribers in the period, it gained 494,000 digital cable customers, 492,000 high-speed data customers and 639,000 voice customers in the period.
The road to the strong first quarter results was paved in mid-2007, when Comcast noticed growth was slowing in practically every product category.
Comcast responded to that trend by focusing on triple play and double play offers and by matching product offerings to customer needs.
“We created special offers for high-speed data and cable, high-speed data and phone,” Roberts said.” We created different packages in different regions of the country because the competition is not consistent.”
That, he said, meant rethinking the national $99 price point for the triple play.
“We needed to make adjustments. Those adjustments appear to be working,” Roberts said.
Roberts said that in light of economic pressures, Comcast also had to diversify its revenue mix, focusing more on non-video products like high-speed data and phone. That too appears to be working—43% of Comcast’s revenue in 2007 came from sources other than basic video.
Comcast is also committed to returning cash to shareholders – through share repurchases and the issuance of a quarterly dividend. Between 2005 and 2009 Comcast estimated the cumulative return to shareholders during that period would be about $16.4 billion, “which I call pretty impressive,” Roberts said.
