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Cable Operators

Comcast Ready to Roll with VoIP

1/10/2005 3:58 AM Eastern

After patiently waiting on the sidelines for years before entering the telephony fray, Comcast Corp. unveiled an ambitious plan to roll out its own voice service in 20 markets by the end of the year.

Comcast is one of the later players to the cable-telephony game -- it only began testing the service in three markets last year -- but it expects to gain significant ground with an aggressive rollout.

If the plan goes as scheduled, Comcast’s voice product would be in front of 15 million marketable homes by the end of the year. Full deployment is expected in 2006. The MSO has about 21.5 million customers across the country.

At the Citigroup Smith Barney Entertainment, Media & Telecommunications conference in Phoenix Monday, Comcast chairman and CEO Brian Roberts said he expects the voice service to reach 20% penetration, or 8 million customers, in five years.

The product will be priced at $39.95 per month for current Comcast customers, and it will include features such as E911 service, battery backup and call waiting. Future features could include customized ring tones, caller ID on the TV, voice-activated dialing and video phone.

Roberts said phone customers would not have to be video or high-speed-data customers to get the service, although there will be discounts for customers who take the bundle.

He added that the voice rollout will be conducted in the same way Comcast deployed its high-speed-data product: “node-by-node.”

While regional Bell operating companies have been drastically reducing prices for their high-speed Internet services to compete with cable modems, Roberts said he would not get involved in a price war for phone service.

“It is not our desire to do this to hurt the phone companies,” he said. “We want to build value in the home. We’re just not coming at this to reduce prices or to change the model. But there is no other facilities-based competitor in the home.”

While Roberts said the voice product will be the new growth engine for the future, other advanced products are off to a good start.

For example, Comcast added about 181,000 new digital-video-recorder customers in the fourth quarter alone, boosting its total installed base to more than 300,000 DVRs.

Roberts also touted Comcast’s video-on-demand product, adding that the MSO’s customers currently have access to 3,000 titles, which will double by the middle of this year and which could grow to as much as 10,000 by the end of the year.

September