Via Mike Mozart & George Hodan
Comcast is ready to re-enter the wireless space after failing the first time several years ago. They are calling this new entry, Xfinity Mobile. The question I have is simply this… will they be successful this time around? I listened to their announcement. Let me share some initial thoughts on this important area and whether I think Comcast (CMCSA) will be more successful this time around.
As a wireless analyst, I want Comcast to succeed, but this next move into wireless seems both good and bad. It’s kind of a half-throttled approach. Plus, they just seemed to rush over a key part of the presentation. The whole reason that Comcast is rushing back into wireless. Wireless TV or mobile TV is transforming the television space and they need an offering in order to stay relevant.
Xfinity Mobile Didn’t Focus on Threat from Wireless TV, Mobile TV
First, a bit of history. Comcast, and in fact many in the cable television industry already gave wireless a try several years back. They failed. In fact, others like the Facebook (FB) phone and Amazon Fire Phone (AMZN) also tried and failed as well. We all learned that wireless is more complicated and difficult to be successful at.
After this failure, Comcast, Time Warner Cable, Cox and other cable television competitors decided to get out of town. They pooled their spectrum together into a company called SpectrumCo, and sold it to Verizon Wireless (VZ). Back then, they probably thought they were saying goodbye to wireless forever.
However, things change and because of competition and a changing marketplace, they need to get back into wireless to compete with new competitors like AT&T (T) who are winning market share, innovating and changing the industry. AT&T acquired DirecTV and have created a wireless TV or mobile TV version. They are innovating and charging less and winning customers. Competitors like this are taking business away from the cable television competitors.
Comcast Xfinity Mobile is Second Try at Wireless
So, now cable TV needs to figure out a way to get back into the wireless business and stabilize their business and counter the ongoing loss. This is today’s environment in which Comcast is introducing Xfinity Mobile. During the last few months I expected Comcast to be planning a major wireless initiative.
So far, Xfinity Mobile sounds more like a tiny gnat you swipe away with your hand rather than a real competitive threat. So, the big question is will they be successful this time around? After listening to the conference call, I was impressed with how well they seemed to think through many challenges and opportunities. Last time I think Comcast went in with an arrogant attitude and didn’t understand the character of the wireless industry. This time they do seem to understand the challenges.
Rather than have their eyes on becoming a real wireless powerhouse, Comcast seems happy just trying to gather the low hanging fruit. Does that mean they will be successful? Unfortunately, there is no way to tell at this stage. We will just have to sit back and watch what happens next. Will customers like Xfinity Mobile enough to switch to it, or not? That’s the big question. Another is, if this works will they win sizable market share or just remain a tiny player like they say?
Will Xfinity Mobile Be Successful?
The good news is, this time Comcast will be selling the Apple iPhone (AAPL) , Samsung Galaxy and LG smartphones. These are the most important devices in the marketplace today. That was one of several key mistakes they made last time.
The bad news is they are only interested in selling wireless to their existing customers. That means, from the start, they have a much smaller marketplace to focus on. On the other hand, these smartphones will not be advertised and marketed separately either. Instead, they will just be part of a bundle of Xfinity services.
I think this new wireless phone may be popular with a smaller percentage of their user base. Prices are low, but not the lowest in the industry. I think as new and good as Xfinity Mobile is, it still has much of the same, limited thinking of their last wireless mistake several years ago. Will it play out different this time around? While I hope so, I am not sure it will.
Comcast Xfinity Mobile is Like Google Project Fi
I think competitors like AT&T Mobility, Verizon Wireless, Sprint (S) and T-Mobile (TMUS) can breathe a sigh of relief. It doesn’t look like Comcast is going to be a threat based on this announcement.
Xfinity Mobile will be as much of a threat as Google Project Fi is, which means not much. Google (GOOG) is successful in wireless with their Android sector. However, their own smartphones are a flop, and their move into the wireless MVNO space as a carrier is not doing so well either.
As for prices, they are low, but not the lowest, so not sure how much of a draw it will be for users.
However, I was disappointed that Comcast didn’t address the key challenge they face in their headline. I was expecting to hear how Xfinity Mobile will provide wireless TV or mobile TV. I was expecting to see them talk about competing with new competitors like AT&T DirecTV Now and their mobile TV service. Wireless TV should have been the headline. It should have been first up. It was not. It was only addressed briefly, in the middle of the call somewhere in a brief mention.
Leading in the changing pay TV space is key. Comcast didn’t talk about leading in this changing space. They didn’t talk about transforming anything. They just talked about adding a wireless device to their existing bundle… yawn.
Wireless TV or mobile TV is part of the larger threat that Comcast faces. That every cable television operator faces. That’s the threat and the opportunity. That should have been the focus. It wasn’t. That makes me wonder whether they have their eye on the right balls.
Bottom line, Comcast faces new challenges from new competitors in the television space. Television is changing. It’s going wireless. It’s going IPTV. New competitors. New technology. Lower costs. Skinnier bundles. Everything about the television world is changing. Comcast needs to focus on all these balls. Not on keeping the existing industry from transforming itself.
Will Xfinity Mobile Be a Success?
As a wireless analyst, while I want new ideas to win and I would like to see Comcast be successful, it sounds like they don’t see wireless as the big new opportunity it really is. They lost last time because they offered regular wireless service at a time when the iPhone and Android hit the streets.
This time, instead of seeing this as a hot new growth opportunity, it sounds like they just want to create a more loyal customer base and help them to stabilize any customer losses that will occur as new competitors continue to enter the space with innovative new ideas. It seems like they are taking an incremental approach.
So, while this is an interesting idea, and while they fixed many of the areas they failed in last time around, the real question is: Will this be enough to make wireless successful at Comcast this time around? I hope so, but we’ll just have to wait and see what the customer says over the next few quarters.
Jeff Kagan is an Equities.com columnist. Kagan is a Wireless Analyst, Telecom Analyst, Industry Analyst, speaker and consultant. He follows wireless, wire line, telecom, Internet, cable TV, IPTV, Cloud, Mobile Pay, FinTech and communications technology. Email him at [email protected]. His web site is www.jeffKAGAN.com. Follow him on Twitter @jeffkagan
