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Why Comcast Bought Deep Blue Communications

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May. 8 2019, Published 9:41 a.m. ET

Deep Blue provides managed Wi-Fi solutions to business customers

Early this month, Comcast (CMCSA) purchased Deep Blue Communications, a New York-based Wi-Fi provider. The financial terms of the transaction were not disclosed. Comcast said that the acquisition of Deep Blue would allow it to provide more reliable and advanced network solutions that create greater efficiency for businesses and deliver better experiences for customers. Deep Blue will operate under Comcast’s Business division, which focuses on serving business clients, providing them with a range of services from broadband to voice services.

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Deep Blue provides managed Wi-Fi solutions to business clients. It caters to retail, entertainment, and hospitality industries. Businesses have taken to offering Wi-Fi in order to improve customer experience and loyalty. But some businesses leverage Wi-Fi as a marketing tool. Yelp (YELP), for instance, provides a service called Yelp Wi-Fi where it helps restaurants to market themselves through their Wi-Fi networks. Facebook (FB) offers a feature that helps people on its flagship social network to locate businesses that provide free Wi-Fi.

Comcast expands $6.1 billion Wi-Fi solutions market

The acquisition of Deep Blue is expected to help Comcast expand its operations in the managed Wi-Fi solutions market, which Research and Markets estimates will be worth $6.1 billion by 2022 from $3.1 billion in 2017.

Comcast generated revenue of $26.9 billion in the first quarter, representing an increase of 17.9% YoY. Charter Communications (CHTR) and Altice USA (ATUS) recorded revenue growth of 5.1% and 2.9% YoY, respectively, in the first quarter.

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