), the largest cable MSO in the U.S. announced that it will come up
with two new usage based billing plans for its customers. We
believe that Comcast made this move to restrain the enormous growth
of the online video streaming service provider
According to the company, they will abolish their current 250
gigabytes (GB) per month plan and replace it with two separate data
plans for all Internet users. One of its plans will have a data
capacity of 300 GB and the subscribers will be charged $10 for each
additional 50 GB of data usage. Another plan will possibly have
different tiers of bandwidth; and the customers opting for the
lowest tier will get 300GB.
Recently, Netflix Inc. had criticized Comcast for its data cap
policy. According to them, Comcast had excluded any charges to the
subscribers using Xfinity TV via
) gaming console Xbox 360, from their 250 GB plan.In reply, Comcast
argued that as the videos come from their own equipment and not
from public internet, they don't include it within the data plan.
However, Comcast's new Skype video calling services through TV uses
a lot of data and since it travels through the internet it is
included in the data plan.
Cable operators like Comcast are facing stiff competition from
non-cable operators who provide live video streaming services over
the internet. Non-cable operators who provide video streaming
services use a lot of data, thus subscribers using Netflix might
not find the given plan sufficient enough. We believe that the
company has come up with the plan to discourage customers from
using online video alternatives. The company's new
tiered-data-transmission plan which is coming up only as a trial is
common with telecom Carriers like
Considering these factors, we maintain our long-term Neutral
recommendation on Comcast Corporation. Currently, Comcast
Corporation has a Zacks #3 Rank, implying a short-term hold rating
on the stock.
COMCAST CORP A (CMCSA): Free Stock Analysis
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