Comcast Transforming Itself With Two Distinct Businesses

Mon, 06/07/2010 - 02:55 EDT story from Bharat Ahuja  in
 

Bharat Ahuja submits: With the joint venture (with GE) and eventual takeover of NBCU, Comcast (CMCSA) is transforming itself into a company with two distinct businesses. Number one is the cable services business that includes 51 million homes passed with ~ 24 million video customers, ~16 million internet customers and ~7.5 million voice customers. This part can be thought of as a stable, utility-like business that has developed a moat around itself with its size and scale. The cable business has three moving parts - video, internet and voice service. Despite strong competition in the video business from the DBS operators such as DirecTV (DTV) and Dish (DISH), Comcast has been growing its over-all subscribers (or revenue generating units - RGUs) and importantly, it has been growing its cable business revenue and operating cash flow in mid-single digits. The contributing factors have been the success of triple-play as more customers have signed up for multiple services and also the growth experienced in the commercial services cable business (primarily comprising of small/medium business customers). Cable business has a current annual run-rate of 34 billion in revenue, 13.6 billion in operating cash flow or EBITDA and free cash flow of ~ 4.5 billion.Complete Story »

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