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Comcast Will Go Wireless in 2017

Mari Silbey
9/20/2016
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Comcast announced today that it will launch a new wireless service in 2017, taking advantage of an MVNO agreement signed with Verizon in 2012 and the cable company's own footprint of WiFi hotspots around the country.

Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s wireless plans have been the subject of speculation since the operator activated its MVNO agreement with Verizon Communications Inc. (NYSE: VZ) last year, but today's announcement was still a surprise given the specificity on timing and the confirmation that the wireless offering will combine cellular and WiFi connectivity. CEO Brian Roberts shared the news at the Goldman Sachs Communacopia Conference, stating that Comcast will launch the integrated wireless product around the middle of next year.

Comcast has 28 million customers, and at least 70-80% of them buy a multi-package bundle, Roberts said, describing those multi-package bundle buyers as Comcast's "very best customers." Wireless access will give Comcast the ability to sell even more services to those customers.

Roberts said he expects the wireless product will produce "reduced churn, with more stickiness, with better satisfaction, more product purchasing from us," as it combines Verizon's wireless product with Comcast's 15 million WiFi hotspots.

The cable industry can cite a litany of wireless failures over the years with names like Freewheel, Clearwire and Pivot. However, Comcast is approaching its latest wireless attempt with great care and with some significant new assets in hand. While the vast majority of the company's 15 million or so hotspots are home hotspots -- where a home router supports both a private network ID and a public one for guests -- tens if not hundreds of thousands are public hotspots with many users, proving that Comcast can operate a wireless hotspot network at scale.

Equally important, Comcast's far-flung wireline footprint means the company can continue to add wireless access points with relative ease. The local backhaul capacity provided by fixed-line networks is the most expensive part of trying to extend wireless service, and Comcast already has that foundation in place. (See Analysts More Than Bullish on Comcast MVNO.)

For now, it appears that Comcast will rely entirely on Verizon's network to fill out the cellular portion of its wireless offering, but importantly, Comcast has also confirmed that it's participating in the latest spectrum auction hosted by the Federal Communications Commission (FCC) . The cable company could ultimately supplement the Verizon network with its own spectrum holdings, or even gradually move away from the Verizon network entirely. (See Comcast May Be Lone MSO Wireless Bidder.)


Want to know more about cable's wireless ambitions? Check out our cable WiFi channel here on Light Reading.


There are still a number of questions to settle about Comcast's wireless service before it launches next year. Will there be automatic roaming between cellular and WiFi networks? What selection of phones will Comcast make available? Will Comcast partner with other cable companies including Charter Communications Inc. to further extend its WiFi footprint nationally?

As of today, Roberts says there are more than 100 people working on the initiative under the leadership of Greg Butz, who was promoted to president of Comcast Mobile in July. (See Comcast Could Be Your Next Mobile Provider.)

More to come in the months ahead.

Comcast's WiFi plans follows news Monday that the company is rolling out Netflix on the its X1 video platform. (See Comcast Binges on Netflix in New Beta.)

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

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KBode
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KBode,
User Rank: Light Sabre
9/22/2016 | 8:53:44 AM
Re: Home Alone
And I assume the wireless service will lean heavily on the home user gateways converted into public hotspots as well. I still see people surprised that this even exists.
msilbey
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msilbey,
User Rank: Blogger
9/21/2016 | 2:42:32 PM
Re: Home Alone
I've got to assume that Comcast (and partners) will continue to press hard on expanding the public hotspot footprint. They opened up 10,000 to the public in Philly around the DNC event. 
Mike Hibberd
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Mike Hibberd,
User Rank: Light Beer
9/21/2016 | 6:58:53 AM
Home Alone
Interesting development. Blending Wi-Fi and cellular creates a service which reflects end users' connectivity habits. But with the majority of the Wi-Fi access points in this instance being in residential locations, as you point out, you have to wonder what value they will provide to customers out in public. Freely shared public Wi-Fi in retail and service locations is a massive resource, located in the places where customers convene in large numbers. Most homes typically have very few visitors, so the opportunity to use Wi-Fi to improve the customer experience and drive economic benefits for any operator really lies in those high footfall public places. 
msilbey
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msilbey,
User Rank: Blogger
9/20/2016 | 6:13:13 PM
Re: They All Laughed When AT&T Bought DirecTV...
Agreed. Though from what I've heard from analysts, Comcast will have the ability to be competitive with pricing, which could definitely make things interesting.
KBode
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KBode,
User Rank: Light Sabre
9/20/2016 | 6:01:04 PM
Re: They All Laughed When AT&T Bought DirecTV...
I would think success would depend significantly on price. Also adding another vector that needs support is tricky when you haven't really established you can effectively support the services you already provide. Will be interesting to see what the final project looks like, especially on pricing. 
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
9/20/2016 | 4:07:47 PM
Re: They All Laughed When AT&T Bought DirecTV...
It's  good move for Comcast. A good percentage of customers will want the one-stop shop of wireless and cable. And Netflix too!
inkstainedwretch
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inkstainedwretch,
User Rank: Light Sabre
9/20/2016 | 2:54:34 PM
They All Laughed When AT&T Bought DirecTV...
You still have to excel at something in the bundle, but not every element in the bundle has to be world class; it merely needs to add enough to the bottom line to keep Wall Street analysts from throwing hissy fits. AT&T is demonstrating this at least -- at least so far.

Participating in the spectrum auction begs the question if it can ever amass enough spectum to be practical. Perhaps whatever it buys will be enough, but if the amount of spectrum any service provider needs continues to be more-than-we-have-now in perpetuity, Comcast might be getting in too late.

If Comcast sees some success with this, five years from now I suspect that people will start to seriously wonder, "Well, why wouldn't Comcast or Charter buy [CenturyLink/Frontier/Verizon/T-Mobile/whatever]?"

--Brian Santo

 
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