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Comcast (CMCSA) Enters Wireless Arena with Xfinity Mobile


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On Aug 17, leading cable multi service operator and media giant Comcast Corp. CMCSA completed the nationwide rollout of its wireless services under the "Xfinity Mobile" brand.

Based on a Mobile Virtual Network Operator (MVNO) agreement with U.S. telecom behemoth Verizon Communications Inc. VZ , Xfinity Mobile will be using Verizon's 4G LTE wireless network. The service is available across all of Comcast's distribution platforms, including the company's newly redesigned retail stores and a new online experience at XfinityMobile.com.

Comcast Wireless Service/Brand - Xfinity Mobile

With improving quality of mobile broadband and declining price per gigabyte, there's an increasing risk to wireline ISPs (Internet Service Providers) like Comcast which can lose consumers from home Internet to mobile services. However, with Xfinity Mobile, the company is making both home Internet service and mobile access available at a reasonable price.

Presently, Xfinity Mobile is being offered with data plan options - unlimited data plan for $45 per month for up to five lines with no usage limits or By the Gig plan for $12 per month for each gigabyte of cellular data used. Users who primarily rely on WiFi can choose the $12. Further, consumers can also get access to 18 million Wi-Fi hotspots with Xfinity Mobile.

Comcast claims that customers can save upto 30% on their monthly wireless bills with Xfinity Mobile service. The cable operator, however did not, reveal the number of subscribers who have signed up for the service since it began its rollout. 

Xfinity Mobile is expected to be the nation's first wireless service combining the nation's largest and most reliable 4G LTE network with 18 million Xfinity Wi-Fi hotspots to deliver a great wireless experience, which is cost effective.

Comcast's Wireless Venture So Far

Comcast has been long planning for its much-hyped wireless venture. On May 8, 2017, Comcast and Charter Communications Inc. CHTR announced their plans to jointly work on their wireless services businesses so as to better explore their opportunities, accelerate and enhance each other's ability to participate in the national wireless marketplace. Moreover, both companies plan to enhance their wireless scalabilities with new ventures like the creation of common operating platforms, technical standards development, device forward and reverse logistics and emerging wireless technology platforms to name a few. We believe that such attempts to increase efficiencies should provide better options, innovative products and competitive prices for customers. Additionally, both companies' regional wireless businesses using 4G LTE network have been considerably doing well. Hence, we look forward to the success of this joint wireless venture.

Moreover, Comcast had also bought $1.7 billion in wireless spectrum at a Federal Communications Commission's (FCC) Broadcast Incentive auction in April 2017, to bolster its wireless services. Charter Communications plans to offer wireless service in 2018.

However, we believe that the joint entry of these two major U.S. cable multi-service operators (MSOs) will make the intensely competitive domestic wireless industry a more conflicting battleground.

On a broader scale, the Xfinity Mobile service is an evidence of Comcast's intentions to move beyond the home its own regional subscriber territory. The cable company's entry into the Internet of Things space and its licensing of the X1 platform, internationally, further implies growth at a broader scale.

Bottom Line

The wireless venture may be aimed at retaining customers in this competitive world. Apart from a saturated multi-channel domestic video market, the U.S. pay-TV industry also remains affected by the ongoing massive consolidation between telecom and cable TV operators to strengthen their base. Meanwhile, online video streaming service providers such as Netflix Inc. NFLX , Hulu.com, YouTube etc., pose severe competitive threats to cable TV operators because of their extremely cheap source of TV programming, which is in vogue even in volatile economic conditions.

Zacks Rank and Price Performance

Over the past three months, shares of Comcast have rallied 3.66%, failing to beat the 7.26% growth of the industry it belongs to.

At present, Comcast carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Business , Stocks
Referenced Symbols: NFLX , VZ , CMCSA , CHTR


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