Comcast Not Seen as Big Player in C-Band Auction
Comcast likely wasn't a big participant in the C-band auction, judging by the money it plans to plow into stock repurchases, analysts said. In a Q4 call Thursday, CEO Brian Roberts didn't directly address the FCC C-band or citizens broadband radio service. He said the company's "capital-light" mobile model, led by mobile virtual network operators, "is the right one for us." The stock closed up 6.6% at $51.60.
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Asked about the possible return of traditional net neutrality rules, Roberts said "light-touch regulation has worked" and Comcast supports tenets of net neutrality, such as not discriminating, blocking or throttling. He saw "a possibility" those terms get codified permanently. Raymond James wrote investors that Communications Act Title II regulation, including price regulation, will likely come back with the new administration, despite Comcast management sounding hopeful that the status quo will remain constant.
Citigroup's Michael Rollins wrote that the cabler's plans to resume share repurchases this year and Charter Communications' ramped-up buybacks last month indicate that combined they likely bid less than $7 billion. "Some assumed that cable was a bigger participant in the auction when prices went well beyond expectations," said New Street's Jonathan Chaplin, noting the share repurchases also point to increasing Comcast confidence in an NBCUniversal rebound.
The cable operator's mobile business "will participate very much in 5G," Comcast Cable CEO Dave Watson said. Mobile eventually will add a third layer of "targeted wireless infrastructure" in dense usage areas, using "spectrum we have already acquired," he said.
Comcast ended 2020 with 28.4 million residential broadband customers, up 1.9 million year over year. It reported 19 million residential video customers, down 1.3 million; 9.6 million residential voice customers, down 289,000; and 2.8 million wireless subscriptions, up 774,000. On the likelihood of this summer's Tokyo Olympics happening, NBCU CEO Jeff Shell said “anything can happen in this COVID world," but the company and advertisers expect the event to occur.
Six months in, Comcast's free Peacock streaming service has 33 million sign-ups. Roberts said its Flex platform will carry all major streaming apps in the U.S. in the first half of this year, with Disney+ added soon. He said all customer-care representatives have been working remotely during the pandemic, and the company is "leaning toward" making that permanent.
Releasing new movies direct to consumer via digital rentals has been profitable "and the right move for us," Roberts said. The company plans theatrical releases this year of some franchise films, like the next Fast & Furious and Minions films, he said, but Universal "will lean into" its hybrid distribution model.
Chief Financial Officer Mike Cavanagh said Comcast had $828 million in pandemic-related restructuring costs for the year. He said Q4 broadcast TV revenue was down 12% to $2.8 billion, in part from lower advertising revenue from ratings declines and a delayed fall season launch. That was partially offset by record-high local political ad revenue, he said.