In a landmark pact, Comcast and Liberty Global are extending their respective WiFi networks across the pond, in a new deal that will let subscribers of each service log on to WiFi hotspots of the other provider for no charge.
The trans-Atlantic network-sharing agreement between the world's two biggest cable operators covers more than 5 million hotspots in the US, UK, Belgium, the Netherlands, Poland, Ireland and Switzerland today, with the number expected to rise to more than 10 million by the end of the year, as Comcast Corp. (Nasdaq: CMCSA, CMCSK) continues its breakneck expansion program throughout the US. The WiFi networks are made up of public, commercial and community, or home-based, hotspots.
Comcast, which now has more than 3 million hotspots in the US and aims to reach 8 million by the end of the year, has already experimented with opening up access to its WiFi footprint to foreign travelers. But as Tom Nagel, senior vice president of strategic initiatives for Comcast Cable, explained, those deals have been paid agreements with foreign wireless carriers. (See Comcast Offers WiFi to KDDI, Taiwan Mobile Subs.)
In contrast, the Liberty Global Inc. (Nasdaq: LBTY) deal isn't designed for monetization, but to extend the value of Xfinity Internet. "[We are] extending and enhancing our relationship with customers by giving them a better network to go to," said Nagel, referring to the advantages of WiFi over expensive international cellular data service. Like Comcast, Liberty Global has grand WiFi ambitions, seeking to deploy 2.5 million Wi-Free and WifiSpots hotspots throughout its European countries by the close of 2014.
While there has been significant discussion in the industry about how to generate more money from WiFi, Nagel said Comcast is "very happy [with] the way that we've structured it today." Comcast will continue to test out different options, but according to Nagel, there's no urgent need to create a new WiFi revenue stream.
Although it's not a direct form of monetization, Comcast did recently introduce pop-up messages that appear when consumers are using its public hotspots. Some commentators have characterized those messages as advertisements, but Nagel said that Comcast views them quite differently.
"What that really is, it's an alert system," he said. "We like to call it a watermark." Nagel explained that the messages are meant to remind users that they're on an Xfinity WiFi network, and that there are other free Xfinity services available to them.
As for the extension of Xfinity WiFi to include shared access with Liberty Global, Comcast said in its press release that the two MSOs plan to trial the service later this year. They then intend to offer it broadly throughout their wide footprints next year.
— Mari Silbey, special to Light Reading