Comcast (CMCSA.US) stock price fell sharply by 7%. CFO criticized broadband pricing as “irrational” and unstoppable loss of users

The Zhitong Finance App learned that the stock price of US telecom media giant Comcast (CMCSA.US) closed down 6.6% on Wednesday. Earlier, the company's chief financial officer Jason Armstrong said that the loss of broadband users had not improved this quarter because competitors were attracting customers at lower prices.

Armstrong revealed at an industry conference hosted by Goldman Sachs Group that competitors offer monthly fees in the range of 30 to 40 US dollars for gigabit broadband access, making it difficult for Comcast to show a reasonable return on investment. “It's not a reasonable price point for us,” he said bluntly.

This statement means that Comcast's net loss of broadband users this quarter may be close to the 167,000 households in the previous quarter, rather than the 103,000 that analysts had previously anticipated. Affected by this, Comcast's stock price closed down 6.6% on the same day to $24.59; the stock price of another major Internet service provider, Chartered Communications (CHTR.US), fell 8.1%.

Comcast has continued to face intense competition from other operators in recent years, and the latter have launched bundled home broadband and mobile packages to attract new customers and increase the stickiness of old customers. Currently, the Spectrum brand, a subsidiary of Franchised Communications, has launched a one-year gigabit home broadband package with a monthly fee of 60 US dollars; Optimum Communications, which serves New York and other regions, has launched a gigabit fiber package with a monthly fee of 25 US dollars. Wireless communications giant Verizon (VZ.US)'s Fios fiber plan costs $30 a month, but if you want to reach gigabit speeds, you'll need to pay $80. In contrast, the monthly fee for the Xfinity gigabit internet service currently promoted by Comcast is $50.

Chartered Communications CEO Chris Winfrey acknowledged the pricing pressure during a speech at the same conference on Wednesday. He said, “The first quarter was very competitive, the second quarter was the same, and the third quarter is continuing. You'll see the competitiveness of each company disappear from place to place; some use an integrated model, while others adopt a single strategy.”

Philadelphia-based Comcast recently announced plans to split its media assets from its internet connectivity business, but the company has been plagued by the continued loss of cable TV and home broadband customers.

Armstrong said the company's profit before interest, tax, depreciation and amortization (EBITDA) for the third quarter is expected to improve, and broadband user trends are expected to improve throughout the year.

When talking about the theme park business, Armstrong admits that the “weakness in the Orlando market” that was already evident in the second quarter continued this quarter. He analyzed, “Among these are macroeconomic factors, as well as the influence of other factors such as gasoline prices and air ticket prices. These factors all have had a certain impact on the market.”