Comcast CEO outlines 3-tier mobile strategy

Comcast’s wireless service Xfinity Mobile has pulled in about 2.5 million subscribers and CEO Brian Roberts says there’s still a lot of runway to go.

Comcast was one of the first major cable companies to offer its own mobile service in recent years, launching in 2017 as an MVNO with subscribers riding on Verizon’s network.  

Speaking at a Goldman Sachs investor conference Tuesday, Comcast’s chief executive outlined a three-tier mobile strategy going forward, which includes access to new products as Verizon technology evolves including 5G; continued focus on Comcast’s expansive Wi-Fi network; and over time using its own cellular infrastructure to offload MVNO traffic and reduce costs.  

Roberts called its relationship with Verizon a “win-win,” as mobile service can help increase the lifetime value of Comcast’s core broadband customers, while also offering Xfinity Mobile subscribers new services and products as they arise.

“5G is very much on our road map, and [Verizon’s] making significant investments in their network and our customers are getting the benefit,” Roberts said, according to a SeekingAlpha transcript.

That leads into the first tier of Comcast’s wireless strategy, focused on the wireless network and the relationship with Verizon – something Comcast wanted to be perpetual from the start, according to Roberts.

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In addition to access to broad mobile coverage from Verizon, “every time the technology changes, they come up with some ingenious new offering that’s made available to our customers at the same time as well,” he noted.

Comcast also sees its broad Wi-Fi network, with more than 18 million Xfinity hotspots, as helping to lower costs and expand coverage. The ability to seamlessly bridge mobile and Wi-Fi, as emphasized while more people needed to connect amid COVID, is something that’s going to continue and a place Comcast leads, Roberts said.

The third focus on is its own wireless network or cellular infrastructure, which over time Comcast “might use to supplement our Verizon network to reap even higher cost savings in those highly dense mobile geographic areas.”

That aligns with what analysts at MoffettNathanson said last month would be necessary for cable operators like Charter Communications and Comcast to compete against wireless. 

The firm noted cable’s cumulative mobile subscriber base surpassed 4 million in the second quarter, and at 35%, accounted for a relatively high share of the industry’s net growth. That included Altice USA, which joined the wireless fray a bit later and operates under an MVNO with T-Mobile.

While cable MVNOs all gained subscribers in Q2, the number still pales compared the hundreds of millions of customers the three major wireless carriers collectively serve.

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Charter, which also has an MVNO deal with Verizon and offers mobile service via its Spectrum Mobile brand, and Comcast already look to Wi-Fi to offload Verizon MVNO traffic.

However, the MoffettNathanson analysts said they’d need to do so to keep costs down as Charter and Comcast both are losing money after subscriber acquisition costs. Lowering the price of plans data plans to be competitive “isn’t really an option,” the firm wrote.

“In short, if the cable industry is to mount a more serious threat to the wireless industry, they will have to significantly lower their costs,” wrote Craig Moffett at the time. “And to lower their costs, they will have to offload traffic from the Verizon MVNO agreement and onto their own networks.”

And would need CBRS spectrum to do it, Moffett noted.

In terms of Roberts comments Tuesday, he didn’t provide additional details about offloading with cellular infrastructure. But as expected, Comcast did show up at the FCC’s recent Citizens Broadband Radio Service (CBRS) spectrum auction. Comcast was the fourth biggest spender at Auction 105, behind Verizon, Dish Network and Charter.

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It bid more than $458 million for 830 Priority Access Licenses (PALs) in the shared 3.5 GHz band, and could potentially tap 80 MHz of CBRS spectrum available under General Authorized Access (GAA) use.

Comcast (as well as Charter) have shown interest and pursued tests in the CBRS band for some time, including for mobile and fixed services more than two years ago.

When it comes to Comcast’s wireless ambitions, Roberts told Goldman Sachs analysts that it comes back to convergence among broadband, aggregation, and streaming services.

“We think consumers want that convenience - some of them, many of them. And we want to be that company that they turn to and say, ‘the best products we can get come from your company,’” Roberts said.