Comcast looks to launch its own wireless service in 2017.
During the Goldman Sachs Communacopia investor conference, which was held Tuesday morning, Comcast CEO Brian Roberts revealed that one of the corporation's companies has plans of launching a wireless mobile phone service by mid-2017. Some comment that Comcast's announced wireless network can help to better customer retention.
"The team of well over 150 people today are getting ready ... [for] somewhere in the middle of next year, maybe a little sooner, but not at the beginning of next year, to launch a WiFi and MVNO-integrated product," says Roberts, who noted of the recently promoted Comcast Wireless President Greg Butz as a key executive for Comcast's strengthened mobile connectivity and numerous wireless hotspots.
How It'll Work
Comcast's wireless service will function in a similar manner to that of Google's Project Fi and will leverage its own 15 million Wi-Fi hotspots. Just like Project Fi, when the mobile devices are out of the hotspots' range, they will shift to using a telecom carrier's wireless network, which, in this case, is Verizon.
"We exercised our MVNO rights with Verizon," adds the CEO. "[If] we are able to give you a good value proposition if you are one of our better customers, we believe there will be a big payback with reduced churn, with more stickiness, with better satisfaction, more product purchasing from us."
Comcast And Verizon's MVNO Agreement
Note that Comcast — as part of the SpectrumCo joint venture that also involves Time Warner and Bright House — and Verizon have an existing MVNO agreement that dates back to 2011. The agreement essentially allows the Comcast to retail the Verizon Wireless' service and, over time, have the option to sell on a wholesale basis.
"These agreements, together with our Wi-Fi plans, enable us to execute a comprehensive, long-term wireless strategy and expand our focus on providing mobility to our Xfinity services," said Comcast Cable president Neil Smit in a press release that announced SpectrumCo's agreement with Verizon. "We're excited about this partnership with Verizon Wireless and the future innovations we will bring to consumers."
Roberts did not reveal any further details, such as pricing, regarding the wireless mobile phone service. Comcast informed Verizon that it is going to execute the MVNO agreement in Oct. 2015.
"Obviously, the industry is moving," Verizon executive Fran Shammo said in response to Comcast's notice. "Cable is going to do what they're going to do, and we're going to do what we're going to do."
Implications On Existing Network Carriers
Analysts say that Comcast will put additional pressure on both Verizon and AT&T, which are the United States' top two network carriers, if it pushes through with the said wireless service. Both carriers are currently under pressure from T-Mobile, as customers shift due to better data services pricing and larger data caps.
"This will be bad for the carriers, with the possible exception of T-Mobile US Inc., and good for cable," said Jonathan Chaplin, an analyst with New Street Research LLC.
It should be noted that Google's Project Fi uses bands from Sprint, T-Mobile and U.S. Cellular. However, the service is limited to Nexus 6, Nexus 6P and Nexus 5X since they're capable of automatically switching between connections. Comcast's service offering may support an extended list of devices.
Photo: Mike Mozart | Flickr
