Comcast turned in a better-than-expected quarter (at least better in some ways), showing good growth in its triple-play and Internet offerings, but a decline in growth for digital cable. ARPU increased slightly, also a good sign. The success appears linked to the fact that AT&T and Verizon have not been able to roll out their services as fast as analysts had feared, giving Comcast more time.
We have noted that our own experience with FiOS shows the service to be excellent, but the time required to get it deployed in homes, measuring from when the fiber run begins, is as much as six months. Shortages of critical STBs have also hampered sales.
One interesting note from the Comcast report was that capex declined, which helped the bottom line. This decline, we believe, is a spending timing factor to improve this quarter’s numbers. We believe that Comcast will have to increase capex in 2009. The question now is whether Comcast and the cable companies can outspend the telcos given the pressure on telco voice revenue and the likely “digital pop” cable companies will secure in 2009.