Comcast to Test Wireless Service After Invoking Verizon DealBy
Three-year-old agreement requires six-month waiting period
Third-quarter profit meets estimates as fewer users drop cable
Comcast Corp. plans to begin customer trials of a wireless service after invoking a three-year-old agreement that lets it use Verizon Communications Inc.’s network, Comcast Chief Executive Officer Brian Roberts said.
Roberts, on an earnings call Tuesday, said his company plans to “trial and test some things” after a required six-month waiting period to activate the Verizon agreement. Neither Roberts nor the company made it clear when that six-month period ends.
The cable giant is looking to create new sources of revenue as consumers ditch traditional TV packages and other pay-TV providers like AT&T Inc. and Charter Communications Inc. get bigger through acquisitions. Comcast, which has tried and failed before to enter the wireless market, this time plans to use its more than 11 million Wi-Fi hotspots to challenge the big phone companies.
“It’s an opportunity to take the network and the investments that we have made and see if we can continue relationships,” Roberts said.
Comcast, the largest U.S. cable provider and owner of the Universal film studio, reported third-quarter earnings Tuesday that were in line with analysts’ estimates after fewer people canceled their pay-TV service. The shares fell 1 percent to $61.54 at the close in New York. They have gained 6.1 percent this year.
Profit excluding some items was 80 cents a share, Philadelphia-based Comcast said in a statement. That met the average of projections compiled by Bloomberg. Revenue rose 11 percent to $18.7 billion, topping estimates of $18 billion. Box-office hits “Minions” and “Jurassic World” helped drive up sales in the film division by 64 percent.
Since abandoning its $45.2 billion plan to buy Time Warner Cable Inc. in April, Comcast has focused on retaining video customers by rolling out a new cloud-based X1 platform to more homes. The company lost 48,000 cable-TV subscribers in the quarter, its best showing in nine years. Three analysts surveyed by Bloomberg had projected an average drop of 66,000 last quarter.
Comcast also signed up 320,000 Internet customers in the period, 1.6 percent more than a year earlier. That topped the average analyst estimate of 304,000.
Comcast has more Internet customers than video subscribers. And as people increasingly watch TV online instead of through cable TV, the company has tried to adjust by developing a subscription Web-streaming service called Stream, and introducing a free online video service, Watchable, featuring videos from youth-oriented networks such as Vice Media and AwesomenessTV.
The average monthly customer bill rose 4.3 percent to $143.12.
Comcast has also been taking steps to enter new markets currently dominated by phone companies, such as selling high-speed Internet to big businesses. Sales in the business service division, which sells phone, Web and video services to companies, rose more than 19 percent to $1.21 billion, and has become one of the company’s fastest-growing sources of revenue.
Sales at the NBCUniversal group, which includes the NBC broadcast network, cable channels such as USA and MSNBC, and the Universal film studio, rose 21 percent to $7.15 billion.
Separately, Roberts said Comcast’s NBCUniversal is “likely to participate” in a U.S. government auction next year intended to sell TV-station airwaves to wireless carriers. In the auction, scheduled to begin March 29, the Federal Communications Commission will buy airwaves from TV stations willing to move to other frequencies or go off the air.
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