Comcast is reaping the benefits of its all-digital conversion, which is known internally as Project Cavalry.
Yesterday’s first-quarter earnings call  had plenty of positives for the nation’s largest cable operator. While Project Cavalry may be behind the scenes for Comcast’s customers, it took center stage during the conference call yesterday morning.
“We are actively deploying all-digital in many of our markets, recapturing and more efficiently using our bandwidth,” said Comcast Chairman and CEO Brian Roberts. “This project has dramatically increased our product offerings, particularly our HD and foreign language programming.”
Thanks in part to the additional bandwidth freed up by going all-digital, Comcast now offers more than 100 HD channels and has doubled its foreign language programming to 50-70 channels in each Xfinity market.
Roberts said that as the year progresses, Comcast will have nearly 20,00 on-demand choices, with 3,000 HD options available to its digital customers each month.
Project Cavalry saddled up in 2008, and since then Comcast has deployed 9 million digital terminal adapter (DTA) devices. The all-digital project has been completed in Portland, Ore., Seattle and San Francisco, and Comcast’s goal is to have it in 80 percent of its systems by year’s end. With the above cities, Project Cavalry is roughly 43 percent complete overall and is deployed to some degree in about 70 percent of Comcast’s systems.
Comcast is also seeing operational efficiencies with all-digital and the DTAs. Steve Burke, Comcast’s chief operating officer, said about 80 percent of Comcast’s customers have installed the DTAs themselves.
“In addition to the product enhancements, including more standard-def and high-def channels, we’re already starting to see real operational benefits,” Burke said. “After going all-digital, markets can automate many connects and disconnects that previously required manual intervention. In Portland, Seattle and San Francisco, all markets that completed their conversions during 2009, we’re already realizing significant savings in these markets.
“We’ve eliminated about 25 percent of the truck rolls associated with connect and disconnect activity. While not all markets are equal, we estimate these early markets will generate up to one incremental point of operating cash flow growth over time just based on these financial savings.”
The all-digital project has also increased the take rate on Comcast’s pay-per-view offerings since all of its customers, except the “Lifeline” basic tier subscribers, have access to them.
Project Cavalry has directly led to better product offerings and services, including DOCSIS 3.0 services, which Burke said has lowered customer churn.
Other items of note from yesterday’s call included:
- Comcast added 399,000 high-speed data subscribers in the first quarter, which Burke attributed to the faster tiers that Comcast is offering. As Burke noted, the growth rates over the past two quarters were pretty good for a service that is 10 years old. Currently, more than 20 percent of Comcast’s data customers subscribe to tiers that are 16 Mbps and above. Burke said the faster speeds reduced churn not only for data services, but across other service offerings, as well.
- Roberts said Comcast would soon start rolling out more DOCSIS 3.0-based 100 Mbps tiers after launching a trial last year in the Twin Cities . Comcast execs reiterated the company’s goal of having DOCSIS 3.0 in 80 percent of its systems by the end of the year.
- When asked whether Comcast plans on bonding more than four channels on the downstream, Roberts replied that Comcast currently has more than enough capacity and is actively looking at deploying more HD and 3-D video in order to “stimulate that market.”
- Comcast’s next deployments of its WiMAX-based High-Speed 2go service will take place in Boston and Houston, in conjunction with partner Clearwire.
- After posting a 49 percent gain in business services revenue, Comcast will turn its attention to the medium-size business market, cellular backhaul and metro Ethernet.
- About the only smudge on yesterday’s earnings report was the loss of 82,000 basic video subscribers, but Comcast executives noted that the RBOCs, namely Verizon and AT&T, have stalled their future video deployment plans, and that the subscriber losses were partially offset by the sale of more advanced services and an overall increase in RGUs.
- Former Charter Communications CEO Neil Smit  took part in his first Comcast earnings call as president of Comcast Cable Communications. Roberts said that Smit spent the Sunday before his first official day on the job listening to customer calls at Comcast’s Philadelphia headquarters.