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Analysts: Implications of Comcast's Xfinity Mobile offering


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Analysts: Implications of Comcast's Xfinity Mobile offering

As cable and wireless converge, two industry observers said Oct. 5 that although they see Comcast Corp.'s Xfinity Mobile as a smart and attractive offering, they also see some inherent dangers to it. The service leverages Comcast's network of Wi-Fi hotspots and its mobile virtual network operator agreement with Verizon Communications Inc. On Oct. 3, Bloomberg News reported that Xfinity Mobile had attracted 200,000 subscribers.

Speaking during a webinar sponsored by the Society of Cable Telecommunications Engineers, or SCTE, and the International Society of Broadband Experts, or ISBE, Recon Analytics analyst Roger Entner said the way Comcast has priced its Xfinity Mobile offering makes it "the best deal in wireless that I've seen for low-usage customers."

Xfinity Mobile, which launched across all sales channels in all Comcast markets in August, charges no line access fees on up to five lines and includes unlimited nationwide talk and text with 100 MB of shared data per month. If users want an LTE data plan, they can pay $12 per gigabyte per month or $45 per month for an "unlimited" data plan that carries reduced speeds after 20 GB of usage.

SNL Image
Xfinity Mobile
Source: Comcast Corp.

According to Entner, the Xfinity Mobile offering seems squarely focused on attracting wireless customers who subscribe to Comcast for broadband service and who do not use a lot of data on their phones.

"Cable has to be very smart in how it enters wireless and that one was one of the smartest moves I've seen in really a long time," said Entner, whose research has focused on the wireless experience, how it influences customer behavior and how customers make choices.

Chris Bastian, senior vice president and chief technology officer of SCTE/ISBE, agreed, noting that he lives in a Comcast market where Xfinity Mobile has been advertised. "The marketing has been very successful," he said in terms of encouraging customers to bundle wireless with their broadband and cable TV services.

"They have a track record recently of being a great bundler," Bastian said.

Entner noted, however, that one risk to Comcast's offering is further driving down prices in the wireless market. "I think they have had challenges with their higher price plans where they go head to head with the incumbents. So I think what they need to do is better service integration, something that is more than cheaper because otherwise we're in a race to the bottom."

Wireless prices have continued to fall in recent years largely due to increased competition from the No. 3 and No. 4 wireless operators in the U.S., T-Mobile US Inc. and Sprint Corp. According to the Federal Communications Commission's recently adopted 20th Mobile Wireless Competition Report, the wireless industry's average revenue per subscriber unit fell during 2016 from $44.65 to $41.50, a decline of approximately 7%. "Recent changes by service providers, such as the removal of overage charges, the move toward unlimited data plans, and [equipment installment plans] have all contributed to the reported decline in ARPU," the commission said.