Roberts: There’s Room for Growth

Comcast Chief Says M&A Not Needed, But Still Possible
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Comcast chairman and CEO Brian Roberts continued to try to ease analyst fears in the wake of its terminated merger with Time Warner Cable, telling an overflow audience at the MoffettNathanson Media & Communications Summit that there is plenty of runway ahead for growth.

Roberts said that despite the Federal Communications Commission assertion that a Comcast-TWC merger would create a too-dominant player in the broadband business, that doesn’t mean Comcast is banned from doing other deals.

“One of the regulators went out of their way to tell me last week that every deal is unique, every situation is unique [and] you shouldn’t draw any conclusions off of one to another in the real world,” Roberts said. “We didn’t want to take a great company and make a less great company. The only way to do this was to take a great company and make it greater. Somewhere along the line that wasn’t going to be possible, so we walked away. It was worth a try.”

Roberts said Comcast doesn’t feel the need to go on an acquisition binge and that its focus now is on improving customer service, continuing to roll out its X1 platform and growing the commercial services business.

Roberts said that 25% of Comcast’s triple play customers have the X1 platform, less than 20% of all video customers have it, and the cable giant is in the first year of a three-year initiative to roll it out to its entire footprint. X1 has already had a strong impact in the markets it has been deployed – triple play churn is down 30% with X1 customers, pay-per-view buys are up and DVR penetration is higher in markets with the operating system.

“I like to make money, and that’s what I think shareholders want us to do in the long term and also the short term,” Roberts said.

Even though Comcast is coming off one of its best first quarters ever, and with video subscriber momentum strong, Roberts balked at predicting that the cable operator will have positive video customer growth for the full year, which would be the first time since 2009 that happened for a major cable company. But he said cable in general has greater leverage against satellite than it has ever had.

“No one likes to not go forward,” Roberts said, adding that Comcast has made strides in reducing video customer losses over the years. “I do think there are a lot of satellite homes who can’t access the cloud.”

Broadband has been a major factor in cable’s growth, and Roberts pointed to a 1997 meeting with Microsoft founder Bill Gates, who later invested $1 billion in Comcast and touched off a period of unprecedented growth for the industry.

“Bill Gates in 1997 said to me ‘some day you will have more data customers than you do video customers,” Roberts said. “I didn’t know what he was talking about, but I was happy to take the $1 billion. This quarter, we criss-crossed.”

In the first quarter, Comcast’s high-speed Internet customers exceeded its basic video customers for the first time.

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