Comcast is getting ready to release new details on its upcoming wireless service launch. The company announced today that it will host an analyst event on Thursday, April 6. The event will include senior members of Comcast's leadership team and will cover new information on how the company plans to implement a mobile virtual network operator (MVNO) agreement with Verizon in the coming months.
So what do we already know about Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s plans? Some details are long-standing, like the fact that Comcast will combine its public WiFi footprint with cellular connectivity provided by Verizon Communications Inc. (NYSE: VZ) to offer mobile service. Comcast has also already stated that it will introduce the service around mid-year, and that it will buy handsets up front to give consumers payback flexibility in the same way that traditional wireless carriers do. Fierce Wireless also discovered last week that the iPhone is among the handsets Comcast will include in its arsenal. (See also Comcast Kicks A$$, Earns $80B in 2016.)
What's less well known, however, is how Comcast might make use of additional cellular spectrum to boost the economics of a mobile service. The FCC finally closed out its auction for the 600MHz broadcast TV spectrum late last week, and at least one financial analyst believes Comcast will emerge as one of the top bidders in that event. UBS analyst John Hodulik is predicting that Comcast will walk away with 20MHz of new spectrum at a cost of somewhere between $5 billion and $6 billion. If true, Comcast could use that spectrum to offload some of the traffic it would otherwise have to pay Verizon to transport as part of its MVNO agreement.
There's also the issue of shared-access spectrum, which Comcast could turn to its advantage. Last year the Federal Communications Commission (FCC) made available new unlicensed spectrum in the 3.5GHz frequency band for a Citizens Radio Broadband Service (CBRS). These airwaves can be used for LTE-based services, and Comcast is among the many members of the CBRS Alliance that plan to use the new spectrum to extend wireless coverage. Actual implementation isn't likely until 2018, and CBRS technology will likely make an impact first in indoor spaces like office buildings. Nonetheless, the new spectrum holds promise for helping Comcast wean off of Verizon's more costly network. (See also Shared Spectrum for 5G New Radio.)
There is no guarantee of smooth sailing for Comcast in the wireless sector. As Margaret Bellville, the former COO of Charter Communications Inc. and current vice president of Hitachi Consulting , pointed out recently at Light Reading's Cable Next-Gen Technologies and Strategies event, the cable industry has failed at entering the wireless market countless times in the past. The issue isn't entirely technical either. Even if Comcast had all the spectrum in the world, it would still have to prove it can run a new mobile service successfully without any prior track record. (See Cable Sees Wireless Opps in Partners, Smart Services.)
If Comcast can maneuver successfully, however, it has a chance to upend the wireless market; in part by applying pricing pressure on existing wireless carriers.
In the longer term, Comcast may also have an opportunity to strengthen its position ahead of the race to 5G. As 5G becomes a reality, wired and wireless providers will have to find new ways to work together. The more that Comcast can solidify its role in the wireless market now, the more leverage it will have to negotiate with network partners in the 5G future.
— Mari Silbey, Senior Editor, Cable/Video, Light Reading