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How AT&T–Time Warner Deal Affects Comcast


Nov. 3 2016, Updated 12:04 p.m. ET

AT&T’s competition with Comcast

AT&T (T) is proving to be a strong competitor to Comcast (CMCSA). AT&T’s acquisition of DirecTV last year resulted in the company offering triple-play services with enhanced offerings. Telecom companies such as AT&T (T) and Verizon Communications (VZ) are increasingly offering bundled services in Comcast’s service areas.

The acquisition of Time Warner (TWX) by AT&T would result in the creation of a company that would be involved in both the distribution and creation of content. The acquisition could result in AT&T offering premium content through its triple play services or through its DirecTV OTT (over-the-top) service. Since AT&T is offering triple play services in some of Comcast’s service areas, the acquisition could threaten Comcast’s hold over the markets. It could also result in Comcast losing its video subscribers to the combined company.

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Comcast’s video business in fiscal 3Q16

Comcast’s video customers continue to be on the rise. In fiscal 3Q16, its Cable Communications business had revenues of $12.6 billion, a rise of 6.9% year-over-year. The company had the best third-quarter result in the past ten years with video customer net additions of 32,000 compared to subscriber losses of 48,000 in the same quarter last year.

Comcast’s video business had revenues of $5.6 billion, a rise of 4.5% over fiscal 3Q15. According to Comcast, by the end of fiscal 3Q16, 45.0% of Comcast’s residential customers were using its X1 set-top box.


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