Comcast touts network performance and Wall Street takes note

Comcast
Upstream traffic is up 32% as more Americans work from home. (FierceWireless)

Comcast says its broadband network has earned high marks for its performance so far during the Covid-19 pandemic, and now Wall Street analysts are projecting more broadband subscriber growth for the company.

The company claims its network is delivering above-advertised speeds nationwide, based on the results of more than 700,000 daily diagnostic network speed tests. Upstream traffic is up 32% as more Americans work from home, and downstream traffic is up 11%. The company sees its solid network performance as a bright spot in the midst of the Covid crisis.

“It’s been an amazing three months,” said Comcast Chief Network Officer Jan Hofmeyr. “You work so hard for so many years to build something, and then to see it really come to life in a moment like this is for us just amazing.” Hofmeyr said that since 2017, the company has invested $12 billion to build more than 33,330 route miles of new fiber into the network and to increase network automation and artificial intelligence. 

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The analyst team at Wells Fargo recently increased its Q2 estimate for Comcast broadband subscriber additions to 275,000 from 165,000, a bump of 66%. “Broadband continues to see tailwinds,” wrote analyst Jennifer Fritzsche, noting that both the increase in home-based workers and the higher demand for home-based entertainment are good for Comcast.

Meeting that demand has required many of Comcast’s network technicians to work throughout the pandemic. “In March and April of 2020, as the Covid-19 surge rose, our network teams more than tripled the number of network enhancements they made during the same period a year before,” Hofmeyr wrote in a blog post. He said the team added 1,700 new 100-gigabit links to the network.

“We basically implemented in those two months the entire capacity that we were planning to do for the year,” Hofmeyr told FierceTelecom, adding that Comcast had virtually no network downtime during the upgrade, and was able to add the capacity without hiring additional technicians. “We had that critical workforce that stayed within the data centers, and they performed the upgrades,” Hofmeyr said. 

Meanwhile, Comcast moved almost all of its cable call center staff to a work-from-home model. The company also committed $500 million to support pay and benefits for employees whose jobs are interrupted. The five members of its senior leadership team, two of whom have recovered from Covid-19, are donating their salaries to Covid-19 relief efforts until the crisis ends.

One of those executives, CFO Michael Cavanagh, recently told investors at a Crédit Suisse conference that he thinks the pandemic is prompting consumers to make the switch to broadband, and he expects them to stick with the service. He sees video and mobile as offerings that can make Comcast’s broadband product more attractive. “The lifetime profitability of a broadband customer is so high, we want to continue to optimize that and deepen the relationship,” he said.

At the beginning of this month, Comcast launched a solution for businesses that want to offer enterprise-grade connectivity and security to at-home workers. Competitor Cox Business has also announced a WFH solution that includes endpoint security and Microsoft 365. And last month Comcast told FierceTelecom it was working on a home-based SD-WAN solution. This month Hofmeyr said the company has nothing to announce on that and continues to look at various options for new offerings.

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