EUR 850.00 For Business Accounts Only

Morningstar | Despite a changing distribution and media landscape, Comcast remains well positioned for the future.

Over the past decade, telecom, cable, and media companies have watched as their size and power have been usurped by technology companies. Of the old guard, we believe Comcast is the best-positioned U.S. communications firm. Irrespective of the challenges faced by traditional pay TV, broadband demand continues to accelerate. We believe Comcast is better situated to benefit from this trend due to its faster Internet speeds than many of its peers. With Comcast improving its broadband speeds further with the deployment of DOCSIS 3.1, we believe its performance advantage over the telcos could widen. Most important, even though the implications of 5G wireless fixed broadband are far from certain at this time, we view the deployment of 5G as more of an opportunity than a threat. Fiber will be critical for 5G backhaul. Therefore, we would rather be a regional cable company with near-ubiquitous dense fixed-line coverage than a national wireless company with limited fixed-line coverage. Even in the current 4G marketplace with unlimited data, around 75% of Internet traffic still travels via Wi-Fi. If a substantial portion of current fixed-line traffic switched over to wireless, we doubt wireless networks would be able to handle the added load.We also like Comcast’s positioning with business customers. Established in 2015, Comcast’s enterprise division has delivered impressive share gains in the small-business segment. With its share of the enterprise market still only about 5%, we believe a sizable opportunity remains. While we are less favorable on the NBCUniversal side of the business given the changing media and distribution landscape, we expect NBCU’s broad and deep content offerings, including sports programming, to remain in demand. We also think that a strong film slate and continued theme park strength could help mitigate challenges in the cable and broadcast TV businesses.The current regulatory environment is favorable, as demonstrated by the Federal Communications Commission's reversal of Title II and net neutrality rules. With the threat of pricing regulation diminished, Comcast can potentially offset deteriorating pay-TV economics with higher broadband prices.