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Why Comcast Introduced Its Wi-Fi Gateway xFi

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Comcast introduces xFi

Earlier this month, Comcast (CMCSA) launched xFi, a Wi-Fi gateway for its high-speed Internet customers that would offer a personalized Wi-Fi experience to its users. This Wi-Fi gateway would enable Comcast’s high-speed Internet customers to set up a Wi-Fi network at home, look at the devices connected to the home Wi-Fi network, and set up parental controls.

Comcast discussed the rationale behind the introduction of its xFi gateway during its 1Q17 earnings call. The company stated that it was optimistic about the growth of its High-Speed Internet business, as Comcast currently has more high-speed Internet customers than video subscribers.

Citing a telecompetitor report and research by iGR, Comcast noted that during 2017, 86% of the broadband data usage in the United States (SPY) should occur over Wi-Fi devices at home. Comcast expects this percentage to increase.

As a result, Comcast wants to focus on making its home Wi-Fi experience better for its customers. The company also intends to provide its high-speed Internet customers different levels of services and at different speeds.

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Comcast’s High-Speed Internet business in 1Q17

In 1Q17, Comcast’s (CMCSA) High-Speed Internet and Video businesses had their lowest churn rates in the past ten years. Comcast stated during its 1Q17 earnings call that its High-Speed Internet business had been the largest contributor in terms of revenues to the company’s Cable business. Comcast’s High-Speed Internet business had revenues of $3.6 billion in 1Q17, up 10.1% year-over-year.

At the end of 1Q17, the company added 429,000 high-speed Internet customers, ~397,000 of which were residential customers. As the chart above indicates, Comcast had 25.1 million high-speed Internet customers at the end of 1Q17.

At the end of 1Q17, 54% of Comcast’s residential customers opted for Internet speeds of 100 Mbps (megabits per second) or higher.

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