The largest cable MSO in the U.S.,
) plans to restrict data download limit to 500 GB per month, in the
next five years. Initially, the company may announce a 350 GB data
cap and eventually settle on a higher 500 GB plan, depending on
Higher proliferation of smartphones and tablets, increased
deployment of high-speed 4GLTE connections and availability of HD
quality videos not only drives data usage but also increases
Hence, to overcome this problem, Comcast raised the existing 250 GB
data limit to 300 GB data in 2012. Subscribers who exceed the limit
will be charged $10 for every 50 GB data used.
In order to discourage chord cutting activities by customers, the
company intends to set a very high data cap range, which will not
only support video streaming services but will also check
As per Sandvine (which deals in data management tools), nearly 1.5%
U.S. broadband users consume over 250 GB data every month while
only 1% exceeded the 300 GB data limit. However, it has been
noticed that most customers use only 29 GB data per month. Thus,
based on the report, Comcast is confident that a 500 GB data plan
will satisfy customer requirements over the next few years.
On the flipside, data consumption is increasing in leaps and
) new 4K standard video services are contributing substantially to
Internet traffic at peak hours. With the progress in technology,
high resolution videos are increasingly available which require
considerable data usage. Thus, we remain doubtful whether a 500 GB
plan will be enough in the days to come.
Meanwhile, Comcast reached an agreement to acquire the second
largest cable MSO in the U.S. -
Time Warner Cable
) - for $45 billion. The deal is expected to close by the end of
2014, subject to regulatory clearance. The merged entity will have
around 32 million high-speed broadband (Internet) and 33 million
Currently, Comcast Corporation carries a Zacks Rank #3 (Hold).
A better-ranked stock worth considering in this sector is
) with a Zacks Rank #1 (Strong Buy).
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