Comcast Corp. has accelerated its plans for voice-over-Internet-protocol telephony, and the MSO could launch the service in “four or five” markets by the time of its scheduled fourth-quarter earnings report in mid-February, according to a report by Sanford C. Bernstein & Co. cable analyst Craig Moffett.
While Moffett did not identify those markets, he estimated that they would cover about 5 million households (representing 15% of its total footprint), and that Comcast would begin marketing VoIP in those areas about one month after the announcement.
Comcast has said that it expects about 50% of its plant to be ready for VoIP deployment by early 2005 and 100% to be VoIP-ready by the end of next year.
The MSO is currently testing VoIP service in the western suburbs of Philadelphia; Springfield, Mass.; and Indianapolis.
In his report, Moffett quoted Comcast co-chief financial officer John Alchin as saying that the MSO has “turned 180 degrees in our enthusiasm for VoIP over the past 12 months.”
Facilitating that change in attitude is the shift in economics for VoIP service versus the circuit-switched-telephone business Comcast inherited from AT&T Broadband.
Moffett estimated that VoIP margins “even if the service is offered at a significant discount to their current telephony offerings will be accretive to overall cable EBITDA [earnings before interest, taxes, debt and amortization] margins and will be enormously accretive to growth and ROIC [return on invested capital].”
Moffett also wrote in his report that Comcast “articulated a rapid six- to 12-month deployment schedule for digital simultrans,” which will enable all of its subscribers to access video-on-demand, and not just subscribers to the operator’s digital tier.
He added that digital simultrans would allow Comcast to construct alternatives to its existing expanded-basic programming package and would enable lower-cost digital set-tops that don’t require analog chips.