Don't expect to see a Comcast wireless offering soon

Tom Paine

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Don't expect to see a Comcast-branded wireless offering in your local Comcast store anytime soon, some analysts say.


"In our view, this was a formality, not an indication that the fifth wheel is being aligned. We believe Comcast was merely preserving its right to offer service through the agreement, and see no imminent move by Comcast," Jefferies analyst Mike McCormack said in a note to clients, as quoted by website FierceCable.

Comcast's interests in forming what could be a fifth major cell network (in much of the country) are not clear, and it remains to be seen how far it would go down that path by itself.

Comcast's main goal is probably to support mobile distribution of video content to its customers, although I think the understanding of what that need is has broadened to become more all-encompassing over time. But Comcast does have a potential cost advantage in its millions of WiFi hotspots, which could be combined with the Verizon LTE access it has a right to resell to create a full-fledged network. But the cost advantages would have to be overwlelming for Comcast to consider that route. Indeed, the idea of investing billions to be a reseller of another's spectrum in combinstion with using hotspots (that are in customer's homes in a majority of instances and possibly open to legal challenges down the road), seems risky.

But spectrum is spectrum and is intrinsically valuable. And Comcast is going to need a mobile strategy, if only to support the out-of-home streaming habits of its customers.

And a deal with Sprint, possibly a complete acquisition, has to be an option to be considered as well. But an expensive one.

The MVNO (mobile virtual network operator) arrangement between Comcast and other cable operators (who will mostly end up as part of the proposed Charter/TWC marriage) and Verizon dates back to a controversial 2012 spectrum sale by the cable group to Verizon that included other provisions. The agreement, some including myself argued, was intended to effectively end cable/Verizon competition in both mobile communications and high speed landline communications.

Another consideration is that terms of the MVNO itself may have to be renegotiated, perhaps to Verizon's advantage.

Comcast also needs to consider its growing business services requirements.