Just over a year ago Comcast started talking about their upcoming re-entry into wireless. There was quite a bit of speculation about what this new service would look like and how well it would compete against the industry heavy hitters, AT&T Mobility, Verizon Wireless, T-Mobile and Sprint. They launched Xfinity Mobile in April of this year. Let’s take a look at how they are doing so far.
Recently, I visited Comcast. They gave me a briefing on Xfinity Mobile and other services. This was a very impressive briefing. They are growing rapidly, so their new HQ building is bursting at the seams. That’s why they are building another HQ-like building across the street.
The company has grown quite a bit over the last decade with strategic acquisitions and they see that level of growth continuing. Comcast is a stronger company than many of their competitors who are cable TV only plays. They offer pay TV, network services through NBC Universal, wireless services through Xfinity Mobile and more.
Comcast Xfinity Mobile growth wave
You know how I talk about the growth wave. About how companies and projects are always somewhere on this growth curve. They are either on the growth side, cresting, or on the falling side. Today, Comcast is on the growing side of their growth wave with no end in site.
First of all, we must look at Xfinity Mobile differently than traditional wireless carriers. We see the traditional wireless space breaking into several different categories. AT&T Mobility and Verizon Wireless are in one category. They offer a growing array of services in the wireless and wireline world. A second category is T-Mobile and Sprint, which are wireless only players, yet they have a rapid growth curve ahead of them.
Then there is a very interesting newer category in wireless where Comcast Xfinity Mobile competes. This is the MVNO space. It’s where non-wireless companies can sell wireless services with their own brand, using an existing network. Xfinity Mobile is a reseller of Verizon Wireless services. There are others as well. One other example is Google Project Fi, an MVNO which resells T-Mobile and Sprint.
Charter Spectrum Wireless will enter same space as Xfinity Mobile
Expect Charter Communications to enter this space with their wireless service next year. Wireless is a big opportunity for growth for them as well. This MVNO category will continue to grow and evolve going forward. In coming years, I expect other companies with sizable customers bases will enter. We saw several try this MVNO method in the past. Companies like Amazon Fire Phone and the Facebook phone. Their first attempt was not successful. However, I don’t see their interest in wireless fading.
I see Charter and quite a few other companies giving wireless another try. Some will be successful and others will fail, but this is an enormous opportunity going forward. So, expect to see quite a bit of activity growing and changing the wireless space we think we know.
Comcast Xfinity Mobile has both surprised and delighted users and industry followers. This is a new entry to the crazy wireless marketplace. I expected them to take the same competitive path and go head-to-head with industry leaders AT&T, Verizon, T-Mobile and Sprint.
However, Xfinity Mobile is taking a different path and based on this, they appear to be successful to date. I say so far because we must remember, this is a brand-new service in a brand-new category of wireless and it has only been available for six or seven months.
So, while it’s much to early to judge long-term success, their performance to-date is impressive. The good news for major competitors is Comcast has no intention of competing against them in a traditional sense. Rather, they are using wireless to strengthen their core business. That’s why they don’t try to market wireless as a stand-alone service. They see wireless as one piece of their bundle.
Comcast bundling Xfinity Mobile, Netflix, Hulu, Sling TV, YouTube and more
Instead, Comcast offers their Xfinity Mobile to their existing Xfinity Pay TV customers. The secret sauce is the rule we have all learned over the last few decades. If you want to solidify your customer base, you have to get your customers using multiple services. If a customer uses multiple services, they are more likely to stay put. This is where solid, long-term growth comes from.
This bundling is the secret sauce to Xfinity Mobile success. That’s how Comcast can offer high quality wireless service at such a low cost to customers. They don’t look at wireless as a stand-alone profit center. Rather, they look at wireless as just another slice of the larger pie. A pie with many slices.
In fact, Comcast also offers Netflix, YouTube and Dish Network Sling TV on their XI service. Now there are rumors Comcast and Charter are talking with other providers like Netflix and Hulu. This is an interesting situation. These companies could either be competitors or partners to the cable television industry. Fortunately, cable TV understands it’s better to be partners and keep the customer rather than lose market share.
So, while I don’t see them impacting the traditional wireless players, Comcast and eventually Charter can win at the game they are playing. Each of these slices in the larger bundle has one mission. To retain and solidify the customer base. And so far, it looks like Comcast is doing just that. Let’s hope Charter is as successful.