Comcast, Altice Focusing on Mobile, B2B as Growth Drivers
Comcast and Altice are pointing to mobile and business services as growth drivers in coming years, with executives citing both in appearances Monday at the UBS Global Media and Communications Conference.
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Comcast's residential broadband, wireless, streaming video, movie studios, business services and theme parks account for 50% of company revenues, with that likely reaching 75% in coming years, President Mike Cavanaugh said. Comcast's main competitor in residential broadband remains fiber, he said, noting fixed wireless competition is focusing more on low-end customers. Comcast will regain some market share from fixed wireless as average subscriber monthly data usage continues growing. Fixed wireless "will be a permanent part of the marketplace" but the excess data capacity that has been used to provide the service "will start to tap out and then ... our marginal cost to deliver incremental data is going to be a big advantage," he said.
Cavanaugh said that while Comcast's wireless business is profitable today, it also will have value as part of a new product bundle as a means of retaining broadband subscribers and acquiring customers.
Asked about large-scale M&A, Cavanaugh indicated he's not especially interested. "The bar [to a deal] is really high," with Comcast focusing more on its existing business, he said.
Altice Chairman Dennis Mathew said his company is early in its turnaround, noting it is improving customer service and seeing an acceleration in mobile subscribers every quarter. He said Altice brought on 60-plus new upper-level executives. For 2024 "we are going to do more -- more mobile, more fiber" and have a greater business-to-business focus. He said mobile lacked a good go-to-market strategy a year ago and Altice has made structural changes, including more investment in mobile retail.
Altice residential broadband subscriber growth will come with further customer service and network improvements, Mathew said. "There's more work to do," he said. But big declines in truck rolls and customer phone calls point to improvements, he said. Bundling mobile with broadband helps compete against fixed wireless, he said, adding Altice historically "has not done a good job" reacting to competition such as fiber overbuilders.
Mathew said fixed wireless competition is predominantly from Verizon and T-Mobile, with AT&T starting to emerge in some territories. He said Verizon's fixed wireless is especially making competitive inroads in business-to-business. Yet Altice is improving its competitiveness with fixed wireless through stronger sales channels, Mathew argued. He said its marketing is aimed directly at fixed wireless.
Fifty percent of Altice subscribers take video, and the cabler's goal is "right-sizing" margins and packages, Mathew said. Traditional video "defies the laws of basic economics," with content costs high while demand declines and customers want a la carte ability, he said. Asked about exiting video and becoming a reseller of a virtual MVPD service, Mathew said it was "in the early innings" of looking at such options.