Comcast Partnering With Verizon Wireless To Launch Wireless Service Next Year
According to Brian Roberts, chief executive officer of Comcast, the company will be officially joining the wireless market in 2017 by leveraging its network of 15 million Wi-Fi hotspots as well as a 5 year old mobile virtual network operator (MVNO) agreement with industry leader Verizon Wireless. The move to partner with the biggest mobile operator in the United States also serves as a means for Comcast to set up a new revenue stream.
As reported by the Wall Street Journal, Comcast is planning to market wireless services within its current footprint, as opposed to having a countrywide launch. Still, considering the 28 million customers of Comcast purchasing bundles of TV, web, and landline telephone services, the multiple system operator (MSO) finds itself with a significant market to upsell to.
Some industry watchers are already saying that Comcast’s move will have an impact in the wireless industry. Others also believe that the company is in a good position to still have direct control over wireless operations, even only in MVNO capacity, and if all goes well, Comcast can later build on this move in order to further expand its mobile services. Moreover, some analysts are pointing out that as a mobile operator, Comcast could potentially attract as much as 75 percent of customers’ data usage unto Wi-Fi.
For some time now, Comcast has been eyeing to enter into the wireless business. Last year, it did well by executing its MVNO deal with Verizon Wireless, and hinting only that it would debut a form of wireless service some time this year. Then back in July earlier this year, the company made a series of moves that indicated it was serious with its intention to debut mobile services, including announcing the promotion of Greg Butz as the head of a new Comcast Mobile division. As pointed out by Roberts, this division now has around 150 personnel. Comcast also took the opportunity to register itself as one of the bidders in the Federal Communications Commission’s ongoing spectrum auction of 600 MegaHertz airwaves.
Needless to say, Comcast will be entering an industry already filled with many MVNO players. Moreover, the MVNO market has become more competitive in the last couple of years, causing prices to drop, and generally presenting more challenges for new entrants. And it is good to remember that not only MVNOs survive the heat of the competition, with familiar brands bowing out in the last several quarters.