Comcast Corporation (NASDAQ:CMCSA) To Soon Provide Superfast Internet
Comcast Corporation (NASDAQ:CMCSA) has figured out how to deliver superfast Internet speeds without requiring replacing of its existing cable lines. The company will initially test its gigabit Internet speed in select homes before rolling it out more broadly starting 2016. The gigabit Internet provides Comcast with an opportunity to improve its broadband revenues without corresponding huge infrastructure investment.
With gigabit Internet, Comcast Corporation (NASDAQ:CMCSA) will be able to deliver download speeds that are at least 10 times faster than what most cable broadband providers can support. The breakthrough in Comcast’s cable Internet narrative is that the company will be able to significantly boost its Internet speeds simply through software update. Ordinarily, delivering such Internet speeds would require massive cable line overhaul. The work of overhauling cable lines usually requires huge financial investment and the upgrade process can be lengthy, sometimes characterized by painful service downtime.
Overtaking the competition
Because of its gigabit Internet breakthrough, Comcast can provide its subscribers with superfast Internet speeds sooner than most cable companies. Comcast gigabit Internet is based on what is called DOCSIS 3.1 modem technology.
With superfast Internet, Comcast can mitigate the disruption of Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL)’s Google Fiber, which also delivers gigabit Internet speeds at competitive rates.
As television viewing shifts to online from traditional pay-TV models, Comcast Corporation (NASDAQ:CMCSA)’s superfast Internet promises to accelerate the adoption of online television services. While that may sound like bad news for the company’s cable video business, there are gains to be made on the cable broadband front. Gigabit Internet will encourage people to stream more, thus increasing their Internet bills. As such, the Internet upgrade allows Comcast to boost its average revenue per user (ARPU).
Comcast Corporation (NASDAQ:CMCSA) favors the strategy of billing Internet based on usage as opposed to unlimited Internet, which is why increased Internet consumption feeds its revenue and profit baskets.
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