Comcast Sits on War Chest — For Now

Comcast has completed the sale of its 57 percent stake in shopping network QVC for $7.9 billion — a windfall that could pay for possible acquisitions and network improvements as it battles regional telecoms.

The buyer, Liberty Media Corp., paid $1.35 billion in cash, $4 billion in 3-year notes, and $2.55 billion in newly issued stock. The structure of the deal, first announced in June, was reworked to include cash, although the purchase price didn’t change.

Comcast executives recently discussed possible uses for the QVC windfall, along with savings related to the AT&T Broadband acquisition, including stock buybacks, dividends, purchasing other companies and upgrading its technology.

“All through the QVC process, we’ve said that improving our strong financial situation and investing for future growth were our priorities, but were not ready to define (specific steps),” Comcast spokesman Tim Fitzpatrick told

Analysts at the financial firm UBS today suggested Comcast may accelerate its entry into the Voice-over-Internet-protocol .

Cable operators are eager to roll out VOIP because it provides a competing service to the more traditional copper-based telephone service and helps up the return for digital upgrades they paid millions for.

Comcast is testing the service in the Philadelphia suburbs, but Fitzpatrick said no changes have been made regarding increasing the capital devoted to it.

“We’re evaluating it and are looking to roll it out on a more widescale basis,” Fitzpatrick said.

Allan Tumolillo, COO of Probe Group LLC, said such a move would make sense given moves like SBC’s partnership to bundle voice and data services with Echostar, a satellite TV provider. Other Baby Bells have signed similar deals.

Tumolillo says cable companies will have to to expand voice platforms and seek a mobile sector alliance/acquisition to match the menu of options.

Lindsay Schroth, an analyst at the Yankee Group in Boston, said Comcast has been rightly focused on integrating and upgrading AT&T’s system and rolling out advanced video services such as video-on-demand and high-definition TV.

Still, will a lot of progress being made on the video side, Schroth believes Comcast should .

“It would be smart for them to get a lead on (VOIP) and start seriously looking at 150,000 subscribers they do have and think about marketing it more,” Schroth said.

In addition to educating consumers, Schroth said there are a host of back-end issues Comcast will be working on before a large scale rollout of VOIP, including equipment upgrades and billing systems consolidation.

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