Comcast on Thursday leapt into the cutthroat market for cellphone service by unveiling Xfinity Mobile, a move that other cable companies are expected to follow as consumers’ rising Internet consumption increasingly pits providers of home and mobile broadband against each other.
The company will offer its Xfinity customers two wireless options: one for unlimited data that costs from $45 to $65 per line a month, and a pay-as-you-go plan for $12 per gigabyte. The service will be available to customers starting in the second quarter, Comcast said.
The new offering is aimed at helping Comcast compete outside the home as Americans’ Internet usage increasingly shifts to mobile devices. With mainstream wireless carriers such as Verizon and AT&T ramping up offerings in unlimited data and online video, Comcast said offering cellphone service can help the company retain customers and extend the reach of its traditional TV product.
Comcast’s network differs from that of its rivals in the phone business. The cable company’s service relies primarily on Comcast’s network of 16 million public WiFi hotspots for connectivity, allowing users to surf the Web, watch video and listen to streaming music on their phones without paying for cellular data. Where the company’s WiFi signals are unavailable, Xfinity Mobile will connect to the traditional cellular network owned by Verizon, which Comcast is using as a result of an airwaves agreement signed several years ago. It’s similar to the approach taken by Google when it launched its Project Fi wireless service.
Comcast views Xfinity Mobile as a way to expand the traditional cable bundle, adding a fourth service on top of residential Internet, landline phone service and cable television. A Comcast Internet subscription is required for Xfinity Mobile to work, the company said. And the wireless service’s lowest rate (the $45 per month plan) will be available only to customers who subscribe to Comcast’s Xfinity Premium Double Play or Triple Play, according to spokespeople.
The monthly wireless plans include unlimited data, in keeping with recent trends in the industry. A Comcast household can subscribe to multiple plans, meaning that a family of four could see two phones signed up for unlimited data and two phones signed up for the pay-as-you-go option. Switching between plans will be hassle-free, the company said during a presentation Thursday, adding that roughly 70 percent of customers today use less than 5 GB of wireless data per month.
Comcast’s enormous scale will likely be its biggest advantage as it seeks to build a wireless powerhouse. Beyond the company’s existing hotspot network, its 29 million customers represent a target audience that is already tied into Comcast’s product and business ecosystem. Those customers will not need to undergo a separate credit check for Xfinity Mobile service, and any billing and shipping information will be pre-populated in Comcast’s online signup forms.
“The simplicity of the offer lends itself to a digital-first experience, which is going to be at a very efficient cost to serve, as well,” said Mike Cavanaugh, Comcast’s chief financial officer.
Under similar pressures, the rest of the cable industry is also expected to move in Comcast’s direction. Charter Communications has said that it intends to launch a wireless service sometime next year.
Comcast is leaping into a highly competitive industry that has seen companies such as T-Mobile and AT&T engage in tit-for-tat price wars, dueling promotions and the return of popular features such as unlimited plans. Because it relies on Verizon’s infrastructure, Comcast’s new service could be hurt if Verizon decides it poses a threat. But for the moment, analysts say, Xfinity Mobile appears poised for a successful launch.
“Wireless should be a positive driver of value for Comcast, and the market isn’t giving them credit for it today,” said Jonathan Chaplin, an industry analyst at New Street Research, in a note to investors Thursday.
(c) 2017, The Washington Post ยท Brian Fung
