Comcast unveils large investment plans

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Comcast, the biggest cable operator in the US, on Thursday revealed a further sharp increase in subscribers and profits in the fourth quarter.

But its shares fell on the back of higher-than-expected capital spending plans for this year.

The cable group has been rapidly rolling out telephone connections in addition to its internet and video services. Offering this bundle of products – triple play – has resulted in more subscribers across the board and higher profitability.

“I think simply it may have been our best year ever,” said Brian Roberts, chairman and chief executive, referring to 2006. “Triple play . . . is the driver of what has changed in the business.”

On the video side, Comcast added 110,000 basic subscribers in the fourth quarter of last year, its strongest growth in 10 years. The total of 24.2m exceeded many analysts’ expectations. It added 488,000 high-speed internet subscribers, and 508,000 new telephone customers in the quarter.

Net profit in the fourth quarter rose to $390m, or 18 cents per share, from $133m, or 6 cents a share. Revenue was up 30 per cent to just over $7bn.

Comcast shares were trading 3.4 per cent lower at $41.97 in midday trading in New York, mainly because of the company’s estimate that capital expenditure this year would total $5.7bn, nearly $1bn more than most analysts had expected.

The shares have had a dramatic rise, up more than 55 per cent from a year ago, as investors put aside concerns about a price war with telecom rivals and decided that cable operators would gain customers as they offered a wider range of products in more places.

Mr Roberts said he wanted to build on this “first-to-market advantage”.

“We can capture market share now,” he said. “We’re going to invest capital to drive that growth.”

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