Comcast CMCSA recently launched a digital security service, Xfinity xFi Advanced Security, across the United States. The service, powered by artificial intelligence (AI) and machine learning technology, will provide protection to users’ connected devices that are attached to their home Wireless Fidelity (WiFi).
The xFi Advanced Security, when attached to the Xfinity Advanced Gateway, will monitor and block any threats to customers’ connected devices. Additionally, the service will inform users of the blocked threats and provide guidelines to secure the affected devices.
Moreover, users can check all the security-related actions taken in a day from the xFi dashboard.
The move by the company comes at an opportune time, as attacks against Internet-of-Things (IOT) devices continues to jump massively With a user expected to have more than 13 connected devices by 2022, per Cisco CSCO, Comcast believes that its demand for security solutions will rise.
Internet Solutions & Services to Aid Cable Revenues
Comcast’s high-speed Internet customers and Internet revenues are expected to increase owing to the security solution along with its Xfinity xFi platform, a customized WiFi experience.
Notably, total high-speed Internet customer net additions were 363K in third-quarter 2018. Additionally, high-speed Internet revenues increased 9.6% year over year to $4.32 billion.
Further, Comcast has extensively deployed DOCSIS 3.1 network, with its latest xFi Advanced Gateway, in several markets in the United States.
We believe upgrading to DOCSIS 3.1 will enable Comcast to compete against AT&T’s T ongoing Fiber-to-the-Home (FTTH) program. Also, all these initiatives are expected to aid Comcast’s Cable Communications (62.3% of total revenues) revenues, which is a positive.
Comcast Corporation Revenue (TTM)
Comcast Corporation Revenue (TTM) | Comcast Corporation Quote
Sky Strengthens Pay-TV Position, Expands Market Reach
In addition to gaining from Cable business, Comcast’s acquisition of Sky boosts its content offerings and reach. Notably, the company outbid 21st Century Fox’s offer to acquire more than 75% stake in Sky.
Sky’s popularity is primarily driven by offerings like the English Premier League (EPL), which has the rights to show 128 EPL soccer matches for three seasons, from 2019 to 2020. Additionally, Sky has the exclusive rights to distribute HBO’s content like Game of Thrones, making it a valuable asset for pay-TV providers.
The acquisition will also help Comcast to expand in Europe, where pay-TV penetration is rapidly increasing. This will also diversify its top line as the North-American pay-TV market is saturating. Moreover, Comcast is now the world’s largest pay-TV operator, per Reuters.
Further, Comcast will be able to leverage Sky’s streaming offering, Now TV, to fight against the likes of Netflix NFLX, which is currently dominating the streaming market with 137 million global subscribers at the end of third-quarter 2018.
Comcast currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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