uploads///Comcast DMA

Competitive Landscape of Comcast Cable


Jan. 1 2016, Updated 12:05 a.m. ET

Competition for triple play services

Comcast Cable faces stiff competition for its triple play services, that is, its video, voice, and HSI (high-speed Internet) services. Comcast’s (CMCSA) video services business faces competition from DBS (direct-broadcast satellite) providers such as DIRECTV. In July this year, AT&T (T) acquired DIRECTV for a cash and stock transaction valued at $49 billion. This acquisition has further increased competition for Comcast, as the combined entity would be able to offer bundled wireless services along with the cable service offerings.

Telecom companies such as AT&T and Verizon (VZ) are rapidly expanding their fiber-based networks, which overlap 55% of the video business service areas and 60% of high-speed Internet service areas for Comcast Cable.

The chart above shows the designated market areas for Comcast’s cable business as of December 2014.

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Competition in video and high-speed Internet services

Some media companies such as Time Warner (TWX) have started offering both linear programming and on-demand programming through HBO NOW. Such initiatives could result in Comcast Cable’s video services losing subscribers.

When it comes to high-speed Internet, Comcast is facing competition from Alphabet’s (GOOG) Google Fiber, which is increasingly offering high-speed Internet and video services in some of Comcast’s areas and is rapidly expanding into other geographical areas.

Comcast’s voice services are also under intense pressure as the company’s voice customers may prefer mobile phones and Internet-based phone services such as Skype over wireline phones.

Comcast makes up only 0.99% of the iShares S&P 500 Growth ETF (IVW). For investors interested in getting exposure to the entertainment sector, IVW has a 3.2% of exposure to that sector.


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