Comcast hopes to upend the wireless business by offering its customers a service that would cost from $45 to $65 a month, and work with popular devices including iPhones and Samsung Galaxy phones.
“We have confidence in our ability to compete in a crowded marketplace,” Comcast Cable CEO Dave Watson told analysts in a briefing today. He adds, though, that “things won’t happen overnight” and “we will make adjustments over time.”
The service is due to launch by the end of June. Comcast shares opened up 2.3% this morning.
Comcast’s phones would automatically connect to Wi-Fi hotspots when they’re available, harnessing the 16 million (including in-home ones) in its franchise territories. When there’s no Wi-Fi available, and for voice transmissions, the phones would connect to Verizon’s wireless network — part of a wholesale deal that Comcast and other large cable operators struck with the telco a few years ago.
The selling point is that “it’s a great value proposition,” says Xfinity Mobile President Greg Butz. He adds that Comcast will work with several popular phones. “We know you’re not credible in this space if you don’t have Apple and the iPhone, Samsung and the Galaxy — we’ve got them.”
Comcast’s internet customers will be entitled to five lines without having to pay an access fee, with unlimited talk and text and 100 MB of 4G LTE data.
Beyond that, those with what the company describes as “our best X1 packages” could pay $45 a line for unlimited cellular data. Others could pay $65 a line. Those who don’t use much data could also pay $12 per GB that they use. About 70% of customers use less than 5 GB per month, Butz says.
Users will be able to switch between plans whenever they want without a penalty. Family members also can have different data plans.
Comcast says that — since it’s targeting existing subscribers — it will benefit from low costs to acquire customers, and then serve and bill them. It also won’t require a big capital investment.
As a result, execs say that it can quickly be profitable on a per subscriber basis — especially when you factor in the benefits to attract and keep customers.
“It’s been our experience that churn comes down and loyalty goes up,” Comcast CFO Mike Cavanagh says.
The cable giant doesn’t have a specific target for churn reduction, though.
Execs declined to provide details about the terms of the agreement with Verizon, and emphasized how much traffic they expect to route over Wi-Fi.
The mobile devices would automatically find, connect to, and authenticate Wi-Fi connections. “The customer doesn’t have to worry if there’s a hot spot nearby,” Butz says. “All we want to do is just make it simple.”
He adds that customers “love Wi-Fi because it’s faster, it doesn’t count against their 4G LTE data threshhold, and they love Wi-Fi because they know if helps them save money.”
Responding to a question about consumer frustrations connecting to and receiving decent service from public hot spots, Watson acknowledged that “Wi-Fi today is not what it should be. There’s no question. We have room to improve.”
But Comcast’s “aspiration is to constantly improve the Wi-Fi experience,” he adds. “It should be easier. And we’re not going to stop — we’re going to keep at it….We want to redefine Wi-Fi. Part of it is the experience and making it simple and easy. We’ve got work to do. But there’s a big upside, and it’s something we’ll do well.”