Comcast unveils five-year internet price lock to stem broadband losses
April 15 (Reuters) - Comcast (CMCSA.O), opens new tab unveiled a five-year price lock for its Xfinity Internet service on Tuesday, aiming to stem subscriber losses and bolster its broadband business as competition in the sector intensifies.
WHY IT'S IMPORTANT
Comcast has been losing broadband subscribers to wireless giants such as AT&T (T.N), opens new tab, T-Mobile (TMUS.O), opens new tab and Verizon (VZ.N), opens new tab, which offer plans, bundling internet with high-speed mobile data services, that have proven to be popular with customers.
BY THE NUMBERS
The offer gives new Xfinity Internet customers plans starting at $55 a month, locked in for five years with no annual contract required. It also includes a free unlimited wireless line for one year. Customers are free to cancel at any time.
KEY QUOTE
"We're addressing two significant consumer pain points – rising costs and transparency," said Steve Croney, Chief Operating Officer, Connectivity and Platforms, Comcast.
CONTEXT
Comcast said in January it would roll out packages that bundle wireless with higher-tier internet services after losing 139,000 broadband customers in the fourth quarter, well above the more than 100,000 it had projected in December.
The company has since named former Apple (AAPL.O), opens new tab executive Jon Gieselman as chief growth officer for the residential domestic businesses within its Connectivity and Platforms division.
Earlier this month, rival Verizon announced a three-year price lock for new and existing customers on its myPlan and myHome network offerings.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Times
3 days ago
- Times
Sky sells German division to RTL Group for initial €150m
The German division of Sky will be sold to a leading local operator as European groups consolidate to compete with the American streaming giants. RTL Group, the largest German broadcaster, is to purchase the Sky unit with an upfront cash payment of €150 million and a possible additional consideration of up to €377 million. Sky's German business holds sports rights including Bundesliga and Premier League football, as well as the rights to show Formula 1 races. RTL, which is owned by the German media group Bertelsmann, will make the additional payments for Sky depending on the performance of its share price post-acquisition. Comcast, the parent company of Sky, can call for the payment of the additional consideration within five years of the deal closing if RTL's share price is higher than €41, capped at a payment of €70 per share or €377 million.
Telegraph
3 days ago
- Telegraph
Sky retreats from Germany after losing billions
Sky has struck a cut-price deal to sell its German television business after losing billions of pounds on a troubled expansion spree. The media giant announced the sale of Sky Deutschland to Radio Télévision Luxembourg (RTL), Germany's biggest broadcaster, on Friday, in a deal that values the business at €150m (£128m). Comcast had been exploring the sale of Sky Deutschland for several years, which was bought from Rupert Murdoch's Fox for £2.9bn in 2014 but has never turned a profit. Cost-cutting The sale forms part of attempts by Sky-owner Comcast to radically scale back the British broadcaster, which is struggling amid increased competition from streamers. Comcast already slashed the value of Sky by $8.6bn (£6.3bn) in 2022 after acquiring the business for $31bn in 2018. Last year, it also reported a £1.2bn write-down on loans to its German and Italian operations, which were bought by Sky in a £7bn deal in 2014. Struggles in Europe have prompted further cost-cutting efforts at Sky, which recorded a pre-tax loss of £773m in 2023, according to its latest accounts. Plans to cut 2,000 customer service roles were announced in March. Meanwhile, RTL, which is part of media conglomerate Bertelsmann, could pay a further €377m (£321m) for Sky Deutschland based on its future performance. For example, extra payments will be triggered if RTL's share price exceeds €41. The combined business will have 11.5m customers. Thomas Rabe, the chief executive of RTL, said the deal would 'bring together two of the most powerful entertainment and sports brands in Europe and create a unique video proposition across free TV, pay-TV and streaming'. 'Germany has always been different' The German division, which operates in Germany, Austria, Switzerland and parts of Italy, holds the rights to broadcast the Bundesliga (the German football league) until 2029. Francois Godard, an analyst at Enders Analysis, said Sky had struggled in Germany with market share languishing around 10pc. He said earlier valuations of Sky Deutschland had been based on 'magic growth … of course that did not happen'. 'Germany has always been different from the UK. They never reached the kind of penetration they had in the UK.' Meanwhile, Sky's attempted overhaul was dealt a blow last year after bosses discovered an embarrassing advertising blunder. This stemmed from Sky uncovering miscalculations in its ad sales that meant its partners did not receive the correct revenues from their deals dating back years. Like other broadcasters, Sky has also been navigating a shift from linear TV to streaming, as customers switch from expensive satellite TV packages to on-demand streaming apps. Next year, it will face further competition as HBO launches its Max streaming service. In December, Sky secured a deal to keep HBO's shows, such as a new Harry Potter series, bundled with its service, but they will no longer be exclusive to the UK broadcaster.
The Guardian
3 days ago
- The Guardian
Sky sells German pay-TV business to RTL for €150m
Sky has sold its German pay-TV business to RTL, the former owner of Channel 5, in a deal that could ultimately value the business at almost £500m. Germany's biggest broadcaster, which is owned by the media conglomerate Bertelsmann, has agreed to buy Sky Deutschland for €150m (£128m), and a further up to €377m depending on the future performance of RTL Group. Comcast, the parent company of Sky, has been looking to sell its German business for a number of years. The jettisoning of the German operation is part of a wider plan by Comcast to make good on the eye-watering £31bn it paid to secure the Sky group in a bidding war with Disney in 2018. Seven years on and the value of Sky has been written down by almost a quarter, the broadcaster's stranglehold on new prestige TV shows and films has been broken, and bosses continue to deal with an embarrassing £300m advertising scandal in the UK. Sky Deutschland, which operates in Germany, Austria and Switzerland, has never made a profit but after a three-year restructure programme bosses expect the business to break even this year. The German market has proved tough for Sky with fierce competition for prime sports rights and broadband customers making it difficult to emulate the success of its highly profitable UK business. However, in December Sky Deutschland struck a deal securing the lion's share of Bundesliga football matches, with the majority exclusive, through to the end of 2028-29 season. 'Sky Deutschland has made significant progress over the past three years [and] is on track to achieve EBITDA [earnings before interest, tax, depreciation and amortisation] break-even,' said Dana Strong, the group chief executive of Sky. 'This deal provides a strong platform for long-term success and ensures Sky continues to share in the growth of the combined business.' Under the terms of the deal, RTL will have the right to use the Sky brand in Germany, Austria, Switzerland, Luxembourg, Liechtenstein and South Tirol. The element of the deal that could lead to further payments can be triggered by Comcast at any time within five years of the deal closing later in 2026, provided that RTL Group's share price exceeds €41. The stock is currently trading at €31.60. The performance-linked payout is capped at €70 a share, or €377m. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion In 2023, operating losses doubled as Sky recorded a pre-tax loss of £773m, fuelled by a £1.2bn writedown in loans to its German and Italian operations, and a £327m impairment charge at the lossmaking streaming service SkyShowtime, a joint venture with the US media behemoth and Channel 5 owner, Paramount. The combination of the two companies is expected to generate €250m in annual cost savings within three years. 'This combination of RTL and Sky is transformational for RTL Group,' said Thomas Rabe, the chief executive of RTL Group. 'It will bring together two of the most powerful entertainment and sports brands in Europe and create a unique video proposition across free TV, pay-TV and streaming.' The combined business will create a sport, news, entertainment and streaming powerhouse with 11.5 million paying subscribers. The combination of RTL and Sky, the biggest deal RTL Group has struck since it was formed in 2000, will create a company with €4.6bn in revenues.
