Comcast Execs: Wireless An ‘Important Part’ Of Cable Giant’s Business Services Segment
Alongside Comcast’s very promising six-year-old wireless business, the cable giant is expanding its capabilities to go after more and larger business customers as the company invests more in consistently growing the Comcast Business segment, Comcast executives said Thursday.
A small but mighty area of Comcast’s business that’s been consistently driving growth is its six-year-old mobile wireless business, a segment that the cable giant pledged to be “aggressive” with, executives said during the company’s third-quarter 2023 earnings call.
The cable giant’s wireless offering, Xfinity Mobile, has been quickly gaining momentum since it was introduced in 2017 and is especially popular with residential and small-business customers, the company said.
“[Mobile] is such an important part of our business services strategy … and we believe strongly that we have a long runway ahead. One thing we’re doing is we’re rolling out a ‘buy one, get one’ offer that scaled at end of Q3 [and] is kicking off in earnest in Q4,” David Watson, Comcast Cable’s president and CEO, told investors on the company’s third-quarter 2023 earnings call Thursday. “It’s just an example in both residential and in small business, we’ll continue to be very aggressive in mobile over time.”
In its third-quarter 2023, the wireless segment continued to blossom with revenue driven by continued strong momentum in customer lines, which were up 6.2 percent year over year to 6,278 million total lines, said Comcast CFO Jason Armstrong. The company added 294,000 new wireless lines in the quarter.
Alongside wireless, two of Comcast’s biggest areas of investment and growth are within connectivity and business services, which are consistently generating revenue for the company, said Michael Cavanagh, Comcast’s president and former CFO.
Comcast’s Business Services Connectivity segment, formerly known as the Business segment, pulled in $2.30 billion during the third quarter, representing 4.7 percent growth compared with $2.22 billion from the Business segment during 2022’s third quarter. The company attributed the growth to an increase in revenue from SMB customers, driven by higher rates, and an increase in revenue from midsize and enterprise customers.
The company’s business unit has historically played well in the SMB customer segment, but Comcast is focused on growing all categories of business customers, including enterprises, Watson said.
“We have been for some time working with partners and certainly with the acquisition of Masergy, we’ve been expanding our capability to go into other areas—now we have global opportunities to take care of customers,” he said. “The key here is to be able to take care of customer needs wherever they are … it’s sales force and adding some people that can drive midmarket and enterprise where the customer locations are.”
The Philadelphia-based company has more than 2.5 million domestic business customers, which Comcast said earlier this year is more than any competitor.
Comcast’s network footprint now passes 62 million residential and business customers and the company is on pace to meet or exceed its goal of 1 million new homes and businesses for 2023—a “material step up” compared with 2022, according to Armstrong.
Bill Stemper, president of Comcast Business, is transitioning to chairman emeritus, the company said last month. The longtime Comcast executive has led the $10 billion Comcast Business segment since its inception in 2006. Succeeding him in the role is Edward Zimmermann, most recently Comcast Business’ CFO and chief of strategy.
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—rose 1.1 percent year over year during the third quarter of 2023 compared with the previous reporting segment that was called Cable Communications. The Connectivity and Platforms segment generated revenue of $20.27 billion, up from $20.05 billion a year ago.
Comcast’s total domestic broadband customer relationships—residential and business customers—which saw a decline last quarter, returned to growth with an increase of 3.8 percent in revenue growth during the third quarter of 2023.
For the third quarter of 2023 that ended Sept. 30, Comcast reported revenue of $30.12 billion, a modest 0.9 percent increase compared with third-quarter 2022’s result of $29.85 billion.
The cable giant posted adjusted earnings per share of $1.08 cents compared with 96 cents per share for the same quarter of 2022.