COMCAST PUTS NUMBERS ON VoIP ROLLOUT

Comcast laid out one of the cable industry's most aggressive plans for VoIP last week , committing to having 95% of its network VoIP-compatible by the end of 2005 and at least 50% up and running by the end of this year.

Though Comcast has made no projections on service penetration, the rollout will turn Comcast into one of the largest competitors to the RBOCs in residential voice services, if not the largest. At the very least, Comcast will become the most aggressive competitor in an already volatile market rife with residential CLECs and the IXCs.

Despite its grand ambition, Comcast plans to start small. It is rolling out service initially in just three markets: Philadelphia, Indianapolis and Springfield, Mass. If its telephony offering is successful in those trials, Comcast will begin a more aggressive rollout of service around the country, CEO Brian Roberts told shareholders at the company's annual meeting last week. At that same meeting, former chairman and ex-AT&T CEO C. Michael Armstrong stepped down, giving Roberts the chairman position.

“We've used this time since the [AT&T Broadband] merger to prepare ourselves for the rollout of the next generation of telephony, which we believe will include video, integrated messaging and all sorts of features you can do with computer technology that you can't do with circuit-switched technology,” Roberts said.

If the success of Cablevision's rollout of VoIP is any indication, Comcast could be pose a real threat to the RBOCs' voice business sooner rather than later. Cablevision reported having 71,000 voice subscribers at the end of March, adding 40,000 customers in its first full quarter of commercial launch. With 21.5 million cable subscribers, Comcast is seven times larger Cablevision and competes with RBOCs in a vastly greater footprint than Cablevision's New York markets.

Convergence Consulting Group projects that Comcast will capture 3 million VoIP subscribers, including the 1.2 million it serves through AT&T Broadband's old circuit-switched network, by the end of 2005 and hit 6 million by the end of 2006.

“Comcast has made it pretty clear that they are only in these first three trial markets this year,” said Brahm Eiley, an analyst with Convergence. “But in '05, we expect that within the regions they expand to they will be extremely aggressive.”