Comcast Corporation’s (NASDAQ:CMCSA) Broadband Segment is Expected to Rise in Upcoming Years

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By Thomas Copeland on December 5, 2014 Company

Comcast Corporation (NASDAQ:CMCSA), during the recent years, has seen a huge growth in its broadband segment, both in the revenues as well as customer relationships. The revenues of the company have reached to $12 billion from a previous figure of $6.4 billion during a time span of 6 years. Broadband segment is responsible for generating around 20 percent of the Comcast’s total revenues. The margins of this segment are also quite high. According to the estimate of a number of market analyst firms, the margins are currently at 42 percent.

In the year 2013, broadband segment of the company generated around 22 percent of the total EBITDA that the company reported. The main reason for this increase is the higher demand for the connectivity and speed in the region of the United States. To top it off, internet access to smartphones and other gadgets has also driven the growth rate. Around 95 percent of the people, who have an internet connection at their homes, prefer broadband over other connections.

Most of the internet traffic in the United States comes from video-on -demand, internet video and online gaming, for you need high data and even higher speed for all these activities.

Furthermore, the boundaries that were between the telecoms and cable service providers are fainting now. Most of the operator companies are now looking to bundle data services with voice and video services. Consumers these days prefer one service provider. This way, the customers not only cut down on their costs but they also make the process more convenient for themselves: paying bill to a single provider for all the services rather than chasing all of them and paying for each and every service separately. These reasons will continue to fuel broadband growth in the future as well.

A number of market experts are expecting broadband to penetrate further into the U.S. economy. Currently, only 79 percent of the area us covered by broadband, the numbers are expected to rise to 90 percent in the upcoming years. Once the coverage increased, the stocks of Comcast Corporation (NASDAQ:CMCSA) will also go up, for the broadband segment is responsible for 30 percent of the company’s total stocks value.

Comcast Corporation (NASDAQ:CMCSA) has witnessed a huge growth in the subscribers figures over the last decade. The company currently has a total subscriber base of 21.58 million. It is important to mention here that Comcast had only 13 million subscribers back in 2007.

The average revenue for each broadband service for Comcast Corporation (NASDAQ:CMCSA) has recorded to be around $48.21. The figures stood at $40.58 back in 2009.

Coming to the stock value of Comcast Corporation (NASDAQ:CMCSA), the company, on the last trading day of December 4, 2014, started its stocks at a price of $56.85 and closed at a price of 56.38, after hitting the highest price of $57.23. The company has a total market capitalization of $147.34 billion.