Comcast poised to reap benefits from IP video

The growing popularity of TV on the Internet and hi-def content represents a perfect union for Comcast, one analysts observed. Rich Greenfield of Pali Research in New York noted that HD video requires a fatter broadband pipe, giving "the cable industry an advantage over DSL," which is still more prevalent than fiber.

"Just imagine what becomes possible, when Comcast turns on channel bonding across its footprint enabling download speeds of over 100 Mbps," Greenfield wrote in a research note. "In turn, we believe consumers' data subscriptions are increasingly 'sticky.' While no one is calling up cable operators to cancel their subscription, we wonder what happens to video pricing power over the next several years as IP-based video explodes."

Greenfield estimated that Comcast will have $28 billion to spend over the next two-and-a-half years with leverage of less than 3x. Just how it will invest that money represents an uncertainty that made most of Wall Street skittish last week when the operator announced its second quarter results.

The Philadelphia cable giant cleared $588 million on revenues of $7.7 billion, nearly a third more than last year, but Wall Street still gave it a paddling for capital expenditures of nearly $1.6 billion. The stock price took a 5 percent hit, slipping from $28.54 to down around $27.10 by Friday close.

Comcast added 670,000 VoIP customers for a total of 3 million; launched 2.1 million digital set-tops in advance of the July 1 security integration ban; and added a record 823,000 digital subs for a total of 14 million out of its entire subscriber base of 24.2 million.

For more:
- Comcast's 2Q summary is here
- Multichannel covers the results here
- The New York Times coverage is here