Trouble for Comcast?

Allan Tumolillo, COO of Probe Financial Associates, who is now becoming quite well known for his radical missives believes that there maybe some dark clouds looming over Comcast. He warns people should not get too obsessed with company’s first quarter earnings, and its revenue per customer. “The issue for investors is whether the ever-increasing revenue per subscriber metric is sustainable as telco competition starts to rollout for video services,” he writes. He does make good points – Comcast’s digital TV subscriber base is “approaching near-term saturation,” while there are early signs that broadband subscriber growth has dropped a notch. “Basic subscribership is flat to declining. If growth is slowing down and the underlying core base of customers is not growing, Comcast may be faced with some limits to growth,” he says. He is not too thrilled with the prospects of Comcast’s VoIP business as well. Comcast expects to make $40 a month and get eight million subscribers in four years. I have often said that the “free-for-all” competition in the telecom space will push pretty much including cable and bells on a downward spiral. At $40 a month or $480 a year, Comcast expects around $3.9 billion in 2009. That’s more than 20% of the total VoIP projections for that year. You think that is going to happen? I don’t think it will! VoIP is a money savings play, and people will play the price game in order to gain subscribers. “Verizon has clearly stated that one of its goals in FTTP is to force down cable rates,” adds Tumolillo.


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