Comcast Business One Of The Cable Giant’s ‘Biggest Areas Of Opportunity’
The cable giant says it already has more domestic business customers than any competitor and is targeting a $50 billion market opportunity within its footprint, as well as a $70 billion to $100 billion total market opportunity that the company can pursue by leveraging technology and partners outside its footprint.
Business services are becoming increasingly critical to Comcast’s financial performance, according to the cable giant’s executives.
Two of the company’s biggest areas of opportunity lie within its six-year-old Xfinity Mobile wireless business and business services, Michael Cavanagh, Comcast’s current president and former CFO, said during the Philadelphia-based company’s first-quarter 2023 earnings call Thursday.
Business services, which Cavanagh called the company’s second-biggest area of opportunity, is approaching $10 billion in annual revenue.
“Our advanced and adaptable network infrastructure is much better suited to serving commercial and government locations compared to the legacy wireline and wireless providers,” he said.
[Related: Comcast Broadband Growth Wanes As Wireless Shines In 2022 ]
Beginning in first-quarter 2023, Comcast changed its reporting structure to highlight two areas: Connectivity and Platforms and Content and Experiences, which contains the company’s media and entertainment businesses.
Comcast’s newly named Business Services Connectivity segment, formerly the Business segment, pulled in $2.28 billion during the third quarter, representing 5.1 percent growth compared with $2.17 billion from the Business segment during 2022’s first quarter.
The company has more than 2.5 million domestic business customers, which Comcast said is more than any competitor. Comcast is targeting a $50 billion market opportunity within its footprint, Cavanagh said.
The executive also pointed to the $70 billion to $100 billion total market opportunity “that we can now go after by leveraging our technology and partners outside of our footprint,” he said.
Comcast’s total domestic broadband customer relationships increased by 82,000 to 52.5 million in the first quarter of 2023.
Comcast’s Connectivity and Platforms revenue—which includes high-speed internet, voice, video, cable TV and Sky-branded TV channels and wireless and business services—saw a 1.8 percent decrease during the first quarter of 2023 when compared with the previous reporting segment that was called Cable Communications. The Connectivity and Platforms segment generated revenue of $20.15 billion compared with $20.51 billion in first-quarter 2022.
“[Business services] should be a material contributor to our growth profile in Connectivity and Platforms and overall,” said Jason Armstrong, Comcast’s new CFO, who was promoted in January.
The company added 355,000 new wireless lines in the quarter.
“Our focus will be on serving our existing base … increasing our penetration in wireless and making proactive investments to expand our footprint in the fastest pace in our history,” Cavanagh said.
For the first quarter of 2023 that ended March 31, Comcast reported revenue of $29.69 billion, a 4.3 percent decrease compared with first-quarter 2022’s result of $31.01 billion. The company said that the results reflect an unfavorable comparison to the prior-year period, which included Comcast’s broadcasts of the Beijing Olympics and the NFL’s Super Bowl.
The cable giant posted adjusted earnings per share of 92 cents, up 7 percent compared with 86 cents per share for the same quarter of 2022.