Slower subscriber growth, worries about competition from phone companies and a management crazy enough to make a bold move — all this has Wall Street worried about Comcast (CMCSA), the Philadelphia-based broadband and cable provider.
The Nervous Nellies of Manhattan’s nether regions have pushed the stock down almost 30 percent so far this year. Of course, these very same worrywarts were sweating about Verizon’s (VZ) bold bet on fiber to the home technologies.
The divergent fortunes of Verizon and Comcast are very clearly reflected in this chart.
Verizon has done a better job of winning the hearts and minds of Wall Street, and that is why Comcast stock is moving south, while Verizon stock keeps moving up. Never mind the fact that Comcast has a much bigger footprint compared to say, Verizon. That said, one can’t deny that Comcast has challenges, and Verizon FiOS is not to be taken lightly. Here are some of the issues facing Comcast.
* More HD channels to compete with satellite broadcasters.
* Show that it can offer even higher-speed broadband connections, not just talk about it.
* Make its web services strategy pay off.
* Overcome the “managed” traffic scandal.
* Better Customer Service. Again, Better Customer Service.
Even with those issues, Comcast can put its rivals on the defensive by making a few aggressive moves.
* Get more people signed up to its phone service, and if that means discounts. It is a move that hits at the heart of phone companies’ core money machine: voice.
* Get serious about wireless — both cellular and WiFi. Connections everywhere will help the company get sticky with its customers.
* Boost speeds to 20 megabits and lower prices.
* Offer $15 a month broadband plan for a basic, 3-megabits-per-second broadband connection. This will take pricing power away from their phone company rivals.
* Bring to market a very compelling online video offering.
* CEO Brian Roberts should make a public pledge for better customer service, and start with making TiVo-powered Comcast DVRs available everywhere, especially in downtown San Francisco. 😉
Ignore Wall Street is the final thing I wanted to say — but it looks like management knows that all too well.
“Our job is to keep our heads down and continue to put good operating results on the board,” said Steve Burke, chief operating officer of Comcast, in an interview (with the Wall Street Journal). “If we continue to do that the stock will take care of itself.”