Right now, most of us buy cellphone service from companies such as AT&T, Verizon, T-Mobile and Sprint. But next year, consumers may start to see another option — from Comcast.
The nation's biggest cable company said Tuesday that it plans to launch a cellular carrier, Comcast Wireless, in mid-2017.
Just like other providers, Comcast's service will let customers make phone calls and browse the Web from their smartphones. It will also take advantage of Comcast's network of 15 million WiFi hotspots across the country, which will let the carrier offer mobile voice and data service without having to set up expensive cell towers. (Comcast declined to say whether it would also be selling mobile phones.)
When there's no Comcast WiFi to be found, devices on Comcast Wireless will seamlessly jump onto Verizon's cellular network to stay connected. Comcast will not be the first to try this hybrid cellular-WiFi network, but it will probably be among the largest. And combined with Comcast's existing advantages in size and scope, Comcast Wireless could be priced to compete in an already cutthroat industry.
But why would Verizon allow Comcast — which has 28 million customers — to benefit by using its network? Well, the two companies struck a deal in 2011 that had Comcast giving up some valuable airwaves that Verizon could use to expand its cellular capacity. In exchange, Verizon agreed to grant Comcast the right to set up its carrier that would piggyback on Verizon's infrastructure at agreed-upon rates.
Although Verizon has a nationwide footprint, Comcast's wireless product will be available only where it serves cable customers, said chief executive Brian Roberts at an investors' conference Tuesday. Roberts added that Comcast would probably offer the cellular service as another product in its cable bundle, just as consumers can currently buy phone, TV and Internet access as a package. Bundling may help Comcast offer the cellphone service at more competitive rates.
Comcast and others in the cable industry have explored offering cellular service as they face declines in their traditional TV businesses. Americans are increasingly getting their entertainment online and on mobile devices, and it has led cable executives to think more like traditional telecom providers and, in some cases, vice versa.
As the Internet — and its content — becomes ever more profitable, companies are making massive investments to make sure they own a key slice of that ecosystem. Verizon has bought AOL and Yahoo, giving it control over some highly trafficked websites in addition to its historical assets in mobile telephony. The same logic is driving AT&T as it has begun bundling its cellular service with content from DirecTV, the satellite TV company it acquired in 2015.
Now Comcast, with its massive presence in U.S. homes, wants to expand beyond the living room to people's smartphones. Given Comcast's position in customer-satisfaction rankings, it's unclear whether Comcast Wireless will prove to be a popular product. But for an industry that has already been wracked by price wars and big changes in cellular plans and policies, Comcast does not seem ready to let the dust settle yet.