Imagine that instead of buying your cellphone service from your current provider, you bought it from Comcast. You'd use a Comcast-branded cellphone, you'd place calls on Comcast's "network," and you'd surf on Comcast's mobile data.
That future may be closer than you think. The company is reportedly interested in starting a cellphone service using a combination of its WiFi hotspots and Verizon's own cellular network.
The result could be a nationwide wireless network that's capable of competing with the likes of AT&T, T-Mobile, Sprint and, yes, Verizon itself. By launching a cellular service, Comcast would be able to charge Americans for surfing on Verizon-powered 4G LTE.
Under the terms of a wireless airwaves deal Comcast and a few other cable companies signed with Verizon back in 2012, Comcast won the commercial rights to use Verizon's wireless network and resell it to consumers, according to Bloomberg, which first reported Comcast's plans. Comcast didn't immediately respond to a request for comment. Verizon declined to comment, although company chief financial officer Fran Shammo confirmed to investors Tuesday that unnamed cable companies "are going to execute on that agreement."
Cable companies have long eyed an expansion into the wireless industry, driven by falling subscriptions to cable TV packages and a dramatic move by consumers onto mobile devices such as smartphones and tablets. Cablevision has experimented with the idea, offering a $30-a-month cellular service called Freewheel that runs only on WiFi.
But WiFi has its limits. It doesn't allow callers to keep talking beyond the range of a WiFi router, which is why the cable industry sees the need to access commercial networks run by wireless providers — either by doing deals with them, acquiring them or by setting up entirely new infrastructure (an expensive, risky and unlikely scenario compared to the other two options, analysts say).
By mixing WiFi and cellular service, a provider could vastly expand its footprint beyond what WiFi could support alone. And it would be able to save on the costs of providing service, compared to a company such as Verizon. It wouldn't need, for example, to build and maintain a vast array of cell towers. This is the same logic that sustains other new entrants to the industry, such as Google's Project Fi and Republic Wireless.
Since Comcast already has countless WiFi hotspots in place — and access to many more outside of its fixed cable footprint, thanks to what are essentially "roaming" deals with other cable companies — the company's rumored move into wireless service makes a ton of sense. If it happens, expect the company to begin luring customers away from the Big Four as it packages its service in alongside its TV and broadband service.