Comcast Highlights Wireless Strategy On Q4 2016 Earnings Call

Comcast executives did not address swirling speculation around potential mega-merger plans with Verizon but did discuss the cable giant's emerging wireless strategy during its fourth-quarter 2016 earnings call Thursday.

One of Comcast's stated priorities for 2017 is the successful launch of its wireless service. The Philadelphia-based provider plans to include wireless in its multiproduct bundles that already include internet, cable and landline phone services.

[Related: Comcast's $30M Fiber Investment In Philly Will Help Area Partners Add Customers, Recurring Revenue]

"Our offering will give customers access to a world-class wireless network, with the best mobile devices, with a simple, transparent experience, all for a great value," said Brian Roberts, chairman and CEO of Comcast, on the earnings call.

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Comcast in July appointed veteran Comcast sales and marketing executive Greg Butz to lead the brand-new Comcast Mobile business unit. Comcast will be disciplined with its investment in this business segment and plans to "learn and adapt along the way," said Roberts.

Neil Smit, president and CEO of Comcast Cable, said the wireless offering would be rolled out "in the middle of the year."

Comcast also said during the call that the company is optimistic the new Republican administration will introduce tax reform for telecommunications providers.

"We are looking forward to working with the new administration and the new regulatory leaders … and if there is tax reform, how much gets invested in new opportunities," Roberts said.

A shining spot in Comcast's financials was once again within its business services segment, in which revenue increased 14.5 percent to $1.44 billion in fourth-quarter 2016 from $1.26 billion in the same period one year ago.

Overall, business services revenue was up 16.1 percent for the year, reaching $5.51 billion in 2016 from $4.75 billion in 2015.

"In business services, we really hit our stride with … great traction in the customer segments we serve – small, medium and enterprise," said Roberts.

Michael Cavanagh, Comcast's senior executive vice president and CFO, attributed the continued growth in the business services segment to the increase in the number of small-business customers, coupled with growth in midsize-business services, an area that the cable provider has been working to build up.

Small businesses account for more than 70 percent of business services revenue and about 60 percent of its revenue growth.

Cable communications revenue increased 7.1 percent to $12.84 billion in the fourth quarter of 2016 from $11.89 billion in fourth-quarter 2015. Growth primarily was driven by increases in high-speed internet, video and business services revenue, according to Cavanaugh. Comcast saw 1.4 million high-speed internet net new customers in 2016, its best result in nine years and its 11th consecutive year of more than 1 million net additions, he said.

As expected, voice revenue continued its downward momentum, declining 3 percent to $873 million in fourth-quarter 2016 from $899 million in the same year-ago period. Voice revenue saw a year-over-year decline of about 1.9 percent.

For the quarter ended Dec. 31, 2016, Comcast reported a 9.2 percent bump in its consolidated revenue, which increased to $21.03 billion, compared with $19.25 billion in fourth-quarter 2015. Adjusted earnings per share also increased 9.9 percent year over year, from 81 cents in fourth-quarter 2015 to 89 cents during the final quarter of 2016.

Comcast beat Wall Street analysts' expectations of earnings per share of 87 cents. It revenue also did better than expected by Wall Street, topping expectations of $20.67 billion.

The Washington Post reported Thursday that Verizon now has its sights set on a combination with Charter Communications and that Verizon CEO Lowell McAdam has made a "preliminary approach" to officials close to Charter, according to unnamed sources familiar with the matter.