Cable VoIP Projections

by James Gaskin

Cable giant Comcast promises to add 1 million new phone subscribers, in this story. How will they do this?

Comcast and other cable carriers will take over the lead in consumer VoIP in the US because they are aggressively bundling their new phone services to upsell existing customers of TV and Internet access services. Although cable company broadband phone pricing is always higher than competitors like Vonage ($35-$40 pre month versus $20-$25), they offer bundled convenience with discounts bringing down the phone costs to about the same level as Vonage.

Statistics show bundled customers stay put, reducing customer churn by amazing amounts. As the current administration continues to support big business over consumers, regulations will continue to wither and choice will continue to disappear.

Amazingly, short-sighted investors on Wall Street cut Comcast's stock price because they'll spend money getting 1 million new phone subscribers this year. Does market share mean nothing anymore?


2006-02-11 15:52:44
In theory stock value represents the total future potential of generating cash.

I wouldn't interpret the reaction of Wall Street as shortsightedness, as much as a consequence of a (possible) belief in the lack of business feasibility of Comcast's move -- be it whether the target is real or whether the VoIP business generates returns comparable to other opportunities available to the company.

James Gaskin
2006-02-13 14:13:46
The big push is on for growth through new cable services, since the saturation point for cable TV viewers has long been hit. VoIP gives another service option, and slows customer churn. I would expect those features to logically increase share value.

Of course, those who approach Wall Street logically tend to go broke, so maybe the money managers know something I don't.


2006-02-26 08:51:20
CABLE has around 110,000 Service Techs who make an average of 8 house service calls per day installing or servicing '''Existing CABLE'' customers..........this is ONE MILLION potential ''sales'' calls per day for CABLE to resell voip............its a DONE DEAL cable will WIN this WAR!!!
James Gaskin
2006-02-26 09:16:52
Cable will win because they're the only service able to deliver what people want through a single connection: TV, Internet, and telephone. Phone companies will spend billions running fiber to the home in order to compete, and they will leapfrog cable's bandwidth at that time. But that's years and billions and billions away, and unless the cable companies do something really stupid, they'll be the leading carriers by far in two years.

Of course, the odds the cable companies will do something really stupid are about 50/50, so it will remain interesting.