< Return to Bulls pageComcast winning in critical areas
Basic subscriber losses are real and will likely continue as competition rises, but for every basic subscriber Comcast loses to a Verizon Communications (VZ) or The DirecTV Group (DTV) , it gains 7-10 Comcast Digital Voice (CDV) customers. Furthermore, basic subscriber losses are generally customers at lower price points and the new CDV customers gained are far more sticky since they likely take a triple-play bundle.
So far, telco competition has been pricing rationally (Verizon is acutally increasing prices for its FiOS TV service) and will likely stay that way given the high capital spend requirements of the required telco plant upgrade (telcos are the bigger loser in a price war because they are at a cost disadvantage relative to cable). Competition from substitute forms of entertainment has increased in recent years, but this has not slowed the US household appetite for television, which has be increasing over the past few years, despite all the new entertainment options. This is very positive, as it implies consumers place a high value on television and Comcast will be able to more effecitvely increase pricing.
