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Mergers & acquisitions

Comcast Subs Get a Taste of Verizon

Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Verizon Communications Inc. (NYSE: VZ) have wasted no time in launching a joint marketing program Tuesday that will enable the MSO to sell wireless service bundles initially in two markets: Seattle and Portland, Ore.

Comcast Corp. (Nasdaq: CMCSA, CMCSK), along with Bright House Networks , Time Warner Cable Inc. (NYSE: TWC) and, most recently, Cox Communications Inc. , struck a multifaceted deal late in 2011 that included the sale of their respective Advanced Wireless Services (AWS) spectrum to Verizon Wireless for a combined $3.9 billion. That deal also gave the cable operators the option to sell wireless services under their own brand using the Verizon Wireless network: Comcast today becomes the first of the MSOs to unveil the fruits of that co-marketing agreement.

The initial Comcast promotion will offer Visa gift cards (worth $100 to $300) to customers who sign up for the Verizon Wireless/Comcast service bundles, The Philadelphia Inquirer reported Tuesday.

A Comcast spokesman confirmed the market launches, noting that eight Verizon Wireless stores in Seattle will have Comcast staff on hand to walk consumers through the new offers. Marketing materials describing the cable/wireless bundles are being made available in other Verizon Wireless stores in that city, as well as in Portland.

Comcast and Verizon have also set up a toll-free number for potential customers and expect to launch co-branded micro sites later today.

The spokesman said Portland and Seattle were picked as the initial markets because they have strong track records of introducing new services and because both cities are considered tech-savvy. The MSO intends to offer Verizon Wireless bundles in additional markets later this year.

Why this matters
Comcast's initial launch of service bundles in two markets is the first step in what's expected to represent the MSO's long-term wireless strategy. It's already decided to halt the sale of WiMax services from erstwhile wireless partner Clearwire LLC (Nasdaq: CLWR). (See Comcast, TW Cable to Halt Clearwire Sales.)

The services bundling component is also getting off the ground before regulators bless the sale of AWS spectrum to Verizon Wireless, so it would appear that both sides are confident that they will get it done.

For more
Get caught up on the groundbreaking deal.







— Jeff Baumgartner, Site Editor, Light Reading Cable

Jeff Baumgartner 12/5/2012 | 5:45:25 PM
re: Comcast Subs Get a Taste of Verizon

Oh, I'll check into that.. didn't realize that there is that much separation between them, but that would make sense since it would be quite a leap to take it this far if the co-marketing end of it was still hanging out there from a regulatory standpoint. But I wonder if there are some conditions that would alter the co-marketing deal if the spectrum piece somehow fell through. 


 There seems to be some concerns bubbling about both deals, though -- on the spectrum side McDowell at the FCC has already been wondering aloud (at CES last week) if some of this AWS spectrum was won at auction under false pretenses if there was no intention to build out that spectrum. In fact, Cox was the only one that even took its AWS spectrum to those lengths, then smartly backed off the original buildout plan.


Meanwhile, looks like the two micro-sites touting the new bundle offers are now live, or should be soon. Verizon's version is up; Comcast's version was not, at least the last time I checked.


Update: I checked again Tuesday afternoon. Comcast's page w/the VZ Wireless bundling details is now live as well.


JB


 

marjsdad 12/5/2012 | 5:45:25 PM
re: Comcast Subs Get a Taste of Verizon

Jeff: I heard on an investors call, which I haven't seen reported anywhere, where a Comcast exec said the spectrum deal and the marketing deal with Verizon are technically two separate deals. So if the AWS transfer doesn't fly, it has no effect on the marketing deal. Supposedly DOJ is looking into the marketing deal as a separate matter. Some are concerned that Verizon will have no incentive to expand FiOS beyond its original intentions, but analysts think Verizon has felt that way for a long time.


The bigger question is the future of the non-FTTx telco plant generally, and if the wireline ISP duopoly tilts heavily in favor of cable, whether ubiquitous wireless broadband spectrum will ever be an acceptable substitute. I think that's the real urgency in the government's efforts to expand wireless broadband spectrum. The business case for upgrading aging DSL plant just isn't there, and may not ever be there considering the massive loss of landline voice customers.

comtech3 12/5/2012 | 5:45:24 PM
re: Comcast Subs Get a Taste of Verizon

I have a problem with the math here.Comcast invested a billion dollars into Clearwire,on top of what it cost to purchase the spectrum at the auction.The resale to Verizon totalled $3.9b split between those four MSOs appears to be a loss to them in my opinion.It not be better to continue the partnership with Clearwire rather dumping them so early in the game? Or,Comcast and the others could have tried to acquire T-mobile who is the still on the market despite the failed attempt by AT&T.This partnership with Verizon makes no sense,and it is no wonder Sprint has decided to file a VOIP patent lawsuit against Comcast.I would love to see the legal document to the AWS sale because somehow there might be a loophole for Verizon to say you sold this to me,and I am under no obligation to have you piggy back on my backbone.It is ridiculous,and akin to selling someone a car and telling to pick you up for work,and take you home!

Jeff Baumgartner 12/5/2012 | 5:45:23 PM
re: Comcast Subs Get a Taste of Verizon

Comcast's investment in CLWR almost washes out if they can push the AWS spectrum sale through. Comcast was only able to get 30K WiMax subs after all this time, so it's not like they're dropping a hot selling product. Whether they tried all that hard to sell it is another question. 


 Seems like they also cooled to Wimax , weren't willing to plow more money into CLWR to aid its LTE plans, and figured they get everything they want by going with VZ Wireless while getting a measure of control (they have the tech JV and the option to go MVNO in a while) and still avoid having to build a wireless network. To me, the deal seems to make more sense now than it did when it was first announced... i was with you at the time; it didn't make alot of sense to me then.  JB


 




 
AESerm 12/5/2012 | 5:45:23 PM
re: Comcast Subs Get a Taste of Verizon

Seattle and Portland are solid systems, and early adopters. One of the services they helped launch was Clearwire.

steve q 12/5/2012 | 5:45:23 PM
re: Comcast Subs Get a Taste of Verizon

I just see this as a way of verizon saying to the people that have there service we try to be the #1 service provider. But have to say the cable company are better, i just hope those people that have the verizon Fois service do not jump ship,and say to verizon thank for nothing. The only thing i like about the fois is comcast or any other company out there can not better the fiber and that is a plus for that verizon can do that right. Verizon just need better people that just do not know how to do the # game and provide the customer with the best service to stay a wining team.

MMQoS 12/5/2012 | 5:45:21 PM
re: Comcast Subs Get a Taste of Verizon

Just posted to Phil H's comments on the subject of "

<h1 class="blue header biggest">Verizon's Borderless Life</h1>

", his Eric Bruno interview at CES.&nbsp; My to Phil question is whether the home control system being developed by Vz Comm will be marketed by ComCast out of Vz's region.&nbsp;


And what is Vodaphone's part in this agreement?&nbsp; As 49% owner of VzW, it is rumored that Vodaphone has put a lot of pressure on Vz Inc. to emphasize profits over infrastructure and this deal would potentially do that using ComCast infrastructure.&nbsp; Also looking to be a good deal for the Vz Digital Media new biz as well.&nbsp; A win win for all?????


MMQoS

steve q 12/5/2012 | 5:45:19 PM
re: Comcast Subs Get a Taste of Verizon

Hi i see what you mean,but what do you think will happen to the people that work in the verizon corp. With both company doing the same other then the wireless side why will the customer switch .

joanengebretson 12/5/2012 | 5:44:58 PM
re: Comcast Subs Get a Taste of Verizon

Verizon's choice of its initial co-marketing markets is an interesting one. Washington and Oregon are two of the three states where Verizon's sale to Frontier included FiOS markets. FiOS probably wasn't doing very well in those markets or Verizon would have held on to those territories--and Frontier's virtual abandonment of FiOS video since assuming ownership of those lines reinforces that view. Verizon truly seems to be saying, "If you can't beat them, join them."

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