Comcast's Xfinity Mobile Details Get Mixed Response
Wireless industry watcher responses were mixed after Comcast unveiled further details Thursday about its Xfinity Mobile wireless service. This "could be [Comcast's] next growth driver," Wells Fargo analyst Marci Ryvicker wrote investors. The offering "highlights cable's optionality and introduces another potential negative to the wireless industry," Macquarie's Amy Yong said.
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Xfinity Mobile prices -- $12 per gigabyte or unlimited plans for $45 or $65 a month -- are a saving at the low end and "less compelling" at the high end, UBS's John Hodulik wrote. He said the service might help Comcast upsell customers who buy only broadband or broadband and video. Despite drawbacks, the pricing and ability to change plans mid month are attractive parts of the service, Hodulik said.
Xfinity Mobile -- which Comcast said it would roll out in mid 2017 using the company's Wi-Fi network and its Verizon MVNO agreement (see 1609200042) -- is expected to be a profitable, stand-alone business, due to low customer acquisition costs and "a strong MVNO," Chief Financial Officer Mike Cavanagh said in a call with analysts. Comcast officials didn't elaborate on MVNO details. They said the company's cable business would be the marketing arm for the wireless service, offering it as another service in the bundle. Cavanaugh said Xfinity Mobile carries little expense for Comcast aside from financing handsets.
The company said Comcast Xfinity has been in limited employee trials and was offered to its entire employee base beginning Thursday, to be followed by a customer launch within months. It said enterprise customers could be a future growth opportunity, though the service is focused initially on residential.
The company said it worked out handset agreements with Apple, LG and Samsung. The cable operator also said bring-your-own-device functionality will follow. It said it isn't planning to zero rate any apps on its network.
Asked about expanding its broadband network for other small-cell uses such as unlicensed LTE, Cavanaugh said, "We may do that anyway. We have all the opportunities small cells may bring." Company officials said they haven't looked into costs of building out its own wireless network.
With Comcast's Wi-Fi network, handsets will discover, authenticate and connect to hot spots automatically, it said. “This is about how do you take the friction, the hassle out of Wi-Fi and make it easy,” Comcast Mobile President Greg Butz said. In response to a question about Wi-Fi hot spot congestion, Comcast Cable CEO David Watson said, "Wi-Fi today is not what it should be. We have room to improve -- it should be easier."
T-Mobile CEO John Legere took a dig at the mobile offering in a tweet, saying "good luck!" next to a laughing-until-it's-crying emoji.