) the largest cable MSO in the U.S. is introducing a new service
for its voice customers which is expected to challenge large
telecom carriers like
Verizon Communication Inc's
) wireless data packages.
We believe that Comcast is introducing this service to offset
the growing threats from both telecom and satellite service
providers that are taking away its potential customers.
Comcast is launching this service under the name of "voice 2go"
and would allow its customers to make free calls and send messages
through their home based wireless network or through Wi-Fi
hotspots. This service will help Comcast customers to save their
monthly mobile minutes and will be launched soon in the cable
operator's service markets. We believe that this innovative service
will force telecom carriers to adjust their fees for providing
Recently, the company entered into an agreement with other cable
Warner Cable Inc.
Cablevision Systems Corp.
), Cox Communications Inc. and Bright House Networks, LLC to share
around 50000 Wi-Fi hotspots. This agreement will allow the
subscribers to get Wi-Fi connectivity outside their service area.
This move will complement the company's new service offering as
this will enable it to spread the new service to a wider area.
Additionally, we believe that cable MSOs are facing tough
competition in the on-demand video market from satellite TV
DISH Network Corp.
). Stiff competition from online video streaming providers is also
acting as a negative catalyst for the company.
Comcast is looking at wireless data services to compensate the
loss. The company wants to cash in on the roaming Wi-Fi opportunity
which is expected to be a multi-billion dollar market in the next
few years. As customers looks for better bundled offerings, this
type of services will add value to Comcast's customers.
Recommendation: We are maintaining 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
CABLEVISION SYS (CVC): Free Stock Analysis
DISH NETWORK CP (DISH): Free Stock Analysis
DIRECTV (DTV): Free Stock Analysis Report
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VERIZON COMM (VZ): Free Stock Analysis Report
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