Analyst: Wireless customers will begin flocking to Comcast’s Xfinity Mobile

According to a lengthy report issued by Wall Street analyst firm New Street Research this weekend, Comcast’s Xfinity Mobile is poised to start growing significantly this year and next year. Specifically, the firm predicted the MVNO will add double the number of customers in the fourth quarter of this year compared with last year—and the operation could eventually add 2 million customers per year “in short order.”

“We expect Comcast’s wireless net adds to remain sluggish in the first half of 2018, and then to ramp sharply in the second half of the year,” the firm wrote in its report, adding that it expects Charter to post similar growth when it launches its own Spectrum Mobile MVNO service later this year. “We think they could be adding ~450k subs by 4Q18, more than double their adds in 4Q17.”

The analysts also reached a number of noteworthy conclusions in the report:

  • Comcast pays Verizon $5 per GB its customers use, and that rate is tied to retail rates, not fixed.
  • Xfinity Mobile customers use roughly 15% more data than other, similar customers.
  • Cable companies in general will acquire up to 15% of all postpaid customers in their target footprints by 2020—thus essentially stealing those customers from traditional wireless carriers like AT&T and T-Mobile.

New Street’s findings are notable considering Comcast’s management disclosed that the company’s Xfinity Mobile wireless service, an MVNO powered by Verizon’s network, counted 380,000 customer lines at the end of 2017. That figure was up from the 250,000 customer lines Comcast reported in October, but below what most analysts had expected.

Nonetheless, Comcast’s executives said the business remains on track: “We like our game plan. We like the fact that it’s connected to our existing business line,” Dave Watson, Comcast’s CEO for its cable business, said in January. “It’s a really simple business plan that can scale. We’re finding that the by-the-gig approach is working. It’s early still—the branding is just kicking in, and we’re expanding distribution to our existing retail locations. We’re well positioned going into 2018 with mobile.”

At least some in the wireless industry don’t appear worried, however. Comcast’s Xfinity Mobile is “very irrelevant, and I assume that [Charter’s soon-to-launch mobile service] will be irrelevant squared,” T-Mobile CEO John Legere said in February. “The furthest thing from my mind is any concern about the impact of cable.”