Comcast is already one of the nation’s biggest telecom giants, offering XFINITY TV, home Internet and home phone service in markets across the nation. And now it wants to sweeten that package of offerings with a brand new wireless service, known as XFINITY Mobile, which it plans to launch by mid-2017.
For now, Comcast is positioning XFINITY Mobile as a value-added service for its 29 million customers. It will also be available to potential new cable TV and Internet subscribers who live within its service area.
For example, if you already have bundled together your cable TV and home Internet service with Comcast, why not just add in your wireless service as well? Instead of getting two different bills each month – one from your cable provider and one from your wireless provider (e.g. AT&T or Sprint) – you’d presumably have the option to get just one.
What makes this offering unique is that it is not a de novo wireless network. In other words, Comcast didn’t go out and build a brand-new 4G network to handle all that wireless traffic. What it is doing, instead, is partnering with Verizon Wireless.
However, Comcast is not branding the network as Verizon Wireless – it’s calling the network XFINITY Mobile. As a result, some customers might not even realize that Comcast is leveraging the Verizon network. (Although, in a wink and nod to Verizon Wireless, Comcast will note that “the most reliable 4G LTE network” powers its network. Sound familiar?)
All of this is possible because Comcast has 16 million Wi-Fi hotspots scattered around the nation. And, as part of a Mobile Virtual Network Operator (MVNO) agreement with Verizon Wireless that dates back to 2011, Comcast can fill in any coverage gaps with the Verizon Wireless cellular network. So you can think of XFINITY Mobile as being a hybrid network that builds on an existing infrastructure.
XFINITY Mobile plans to automatically connect users’ smartphones to Wi-Fi when it’s available via those hotspots. That’s a clever way of leveraging the network that Comcast already has in place. And customers, too, should like it, because it will save them from consuming data on a wireless network. According to estimates, 80% of all data is consumed via Wi-Fi, so customers may not even notice that they are being switched to slower Wi-Fi networks.
In a world where customers already have a choice between wireless providers like Verizon Wireless, Sprint, AT&T and T-Mobile, it might seem like Comcast is trying to re-create the wheel by launching its own rival wireless network.
But that’s not how Comcast views it. As representatives from the company have pointed out, “We’re not taking on the entire wireless industry.” And, indeed, as pointed out above, this is not even a new wireless network. At best, it’s a hybrid version of the Verizon Wireless network that’s being re-branded as XFINITY Mobile.
One reason for launching the service is simply to get a new incremental revenue stream. If Comcast can convert even a small share of its 29 million customers, that could have a big impact on the company’s bottom line. What’s interesting, though, is that Comcast doesn’t appear to be going out and actively convincing customers to switch.
It’s not paying “switching fees” or “termination fees” to sweeten the pot for consumers who might be on the fence. (Compare that to the world of cable, where Comcast is a lot more aggressive.)
So you could argue that Comcast is not trying to poach customers from other service providers – and certainly not from Verizon Wireless, which is a partner. One strategic option for Comcast might be to use XFINITY Mobile as a sort of trial balloon – if all goes well, Comcast might consider building its own 4G or 5G network. Or, it might decide to gobble up one of the smaller wireless service providers, such as Sprint.
That’s not entirely out of the realm of possibility, given the fact that all the telecoms these days are turning into rival behemoths. In order to compete with the likes of AT&T, a telecom giant has to offer every possible service to customers.
That’s because the way customers consume content continues to change rapidly. One good example: consumers now enjoy watching TV on the go, right on their mobile phones.
That’s an entirely new customer behavior, and one that a traditional cable giant just couldn’t accommodate. But if you offer a wireless option to customers, that frees them up to consumer content wherever they go, on any digital device.
Case in point: the new AT&T/Time Warner mega-entity is now offering AT&T mobile subscribers with unlimited data plans the chance to watch HBO (which is part of Time Warner) for free on their mobile phones. That’s a powerful incentive to switch to AT&T, right?
Comcast is apparently pricing its new XFINITY Mobile service so that it will be affordable enough for most consumers to consider. There will be two different options: an unlimited data plan available for $45 or $65 per month (depending on which other Comcast services you currently are signed up for), and a “pay-by-the-gig” plan, in which customers will pay $12 per gigabyte (GB).
XFINITY Mobile customers will also have the option to mix-and-match plans within a family. Thus, one line on an account might be the “unlimited” plan, and another would be “pay-by-the-gig.”
That seems to be very flexible for customers – but it might be confusing in reality. What happens if someone in the family uses another person’s phone, and racks up a lot of data charges by binge-watching TV shows on the go?
Ultimately, the decision of whether or not to sign up for XFINITY Mobile might involve other factors, not just cost. For example, there’s the whole question of “equal access.”
If XFINITY Mobile users and Verizon Wireless users are essentially sharing the same wireless network at times, will Verizon Wireless users get priority of any kind when it comes to speed and quality?
And then there’s the whole question of which phones will be eligible for XFINITY Network. At launch, it looks like only new iPhones and a few high-end phones from Samsung and LG will be eligible. Customers won’t be able to bring their own phone to the service, so that will obviously slow adoption.
Overall, XFINITY Mobile is an interesting new addition to the wireless scene. More competition should be good for consumers. However, it is getting harder and harder for consumers to understand all of the competing offers and services from the top telecom and cable giants. It will be interesting to see what FCC has to say about all this.
All of them now offer a mix of media, entertainment, wireless and broadband services, and it’s up to consumers to find the right combination that’s right for their own lifestyle.