Comcast VOIP Takes Aim at Telcos

Comcast Corp. (Nasdaq: CMCSA, CMCSK) says it will (finally) take aim at telco wireline voice service in its entire 35-state footprint by the end of 2006 (see Insider Sees VOIP Battle Royal).

The cable operator announced agreements with Sprint Corp. (NYSE: FON) and AT&T Corp. last week, and earlier with Level 3 Communications Inc., in which the carriers will provide connectivity between Comcast Digital Voice and the PSTN (see Level 3 Supports Comcast VOIP).

“We’re positioning our voice service against traditional telephone service,” a Comcast spokeswoman tells Light Reading.

Comcast Corp. will try to convince cable customers and other consumers that its VOIP service is indistinguishable from traditional wireline service -- and less expensive (see Comcast Vaunts Its VOIP). “We will offer the 12 most popular calling features and E911 service,” Comcast's spokeswoman says.

Comcast plans on reaching 15 million homes in 20 markets by the end of this year, then expand to the rest of its 35-state service area by the end of 2006. Its voice service will be sold at a discount to those who also buy video and data service. The voice service will be priced at $39.99 per month, well below the $56 plus taxes and fees Comcast estimates will be the average cost of traditional phone service.

For Sprint, Comcast is just one of numerous cable companies the carrier now supports, and the carrier is trying to penetrate the market further. Sprint spokeswoman Amy Schiska-Lombard says Sprint is working with a number of cable companies on taking the next step of providing wireless VOIP. The Comcast spokeswoman, who asked not to be named, says wireless VOIP is not in Comcast’s plans now.

Of Comcast’s 21.5 million cable customers, 7.4 million are high-speed Internet customers, and 1.2 million of them take the voice service. The Comcast spokeswoman says 75 percent of Comcast’s voice customers have opted for a triple-play bundle consisting of voice, video, and data service.

Comcast began trials with its voice service in late 2004, and launched to real customers in early 2005. Comcast is currently well behind its cable peers Cox Business Services and Cablevision Systems Corp. (NYSE: CVC), which have been offering voice as part of a bundle for several years.

— Mark Sullivan, Reporter, Light Reading