Comcast, the largest US cable television operator, said it expects to lose video customers in 2008 as competitive and economic pressure mounts; its shares fell more than 10 per cent on the news.
The comments from CFO Michael Angelakis came after the company lowered its forecast for 2007 cable revenue growth to about 11 per cent from a previous forecast of at least 12 per cent, citing a “challenging economic and competitive environment.”
The cautious outlook took down other cable stocks. Angelakis said Comcast’s scale across the United States has meant that it has been hurt by the downturn in the housing market and a tougher macro-economic environment.
“When we see a little bit of a rise in both churn and bad debt, that indicates there’s an economic issue,” he told investors at a UBS media conference. Churn is the industry term for customer losses. Angelakis said Comcast expected to lose more basic video customers in the current quarter and into 2008, hurt by competition from new video services from Verizon and AT&T as well as from longer-term competition from satellite TV operators. “We will fight in the streets and do everything we can for retention but I think the expectation that I have is we will lose some share in the video side,” said Angelakis.
In the third quarter, Comcast posted a 54 per cent drop in quarterly profit as it lost more basic video subscribers than expected.