Brian Roberts, Comcast CEO, sees wireless as a growth path with their Xfinity Mobile. He spoke at Goldman Sachs Investment Conference last week. I have been following wireless as an analyst for decades. I have been following the cable TV entry into wireless since it started several years ago. While I do see growth potential for Xfinity Mobile, Spectrum Mobile and Altice Mobile, I don’t see them making a serious impact on the wireless industry in general.
Roberts says Xfinity Mobile has already won 2.5 million wireless customers. He also sees plenty of growth potential as well.
That’s great. While they are doing well so far, there are hundreds of millions of wireless phones and devices in the United States. That means their market share and the impact they have on the industry is very small.
So far, Xfinity Mobile has been in business for a few years, and so far, they have not moved the market share needle.
Xfinity Mobile use sticky bundle to hang onto customers
That says to me that while they will be a wireless player, and wireless will help them hang onto their broadband and cable TV customers with a sticky bundle, they won’t make a measurable impact on the wireless industry at least for the foreseeable future.
Xfinity Mobile is a follower, not a leader in wireless. What I mean is they are not the innovators carving out new directions for growth. Instead, they follow along the path that wireless leaders carve out.
All that being said, they can still use wireless successfully to strengthen their marketplace position.
Xfinity Mobile is a follower in wireless, not a leader
Comcast has grown in many different directions over the last several years. They are not only a cable TV player, but they are a broadband player. In fact, going forward, I don’t consider Comcast to be primarily in the cable TV business. That’s a big shift away from yesterday.
Today, the primary service Comcast offers is broadband. Secondary services are cable TV, VoIP telephone, NBC Universal meaning news and entertainment, and now wireless with Xfinity Mobile.
Each of these different services working together create a sticky bundle of services that helps Comcast hang onto their existing customers.
Xfinity Mobile does not own their own wireless network
Xfinity Mobile does not own a wireless network. They are an MVNO reseller. They resell Verizon Wireless network. That limits the kind of services they can offer. The high cost also limits their profitability.
I see 5G Wireless Pay TV becoming mainstream as it develops in coming years. Since Xfinity is a major cable TV provider, it only makes sense they should be one of the leaders in this space moving forward.
To make this profitable, they will have to either get a better wholesale deal from Verizon Wireless, or they will have to have their own wireless network.
Comcast is not known for innovation and being ahead of the change curve. When I discussed this IPTV and wireless pay TV threat with them, they thought I was crazy.
However, this is the direction the industry is now moving in. Just look at all the new competitors eating market share. Especially with IPTV and 5G being installed at a very fast pace. This pace of change will only accelerate.
Comcast must cannibalize themselves going forward
That means Comcast must cannibalize themselves to remain competitive going forward. They are a well-run broadband and cable TV company, but they face growing challenges from new competitors and new technologies.
Plus, to become more profitable in wireless, Xfinity Mobile will have to send more traffic over their own wireless network. They are doing this in markets within their region.
Wireless and IPTV have been rapidly growing segments and changing industry. It will continue down this path for the foreseeable future as 5G becomes reality in market after market.
I don’t think Comcast is interested in wireless the way wireless carrier competitors are. In fact, if they didn’t have a competitive threat, I don’t think they would be in wireless at all.
Xfinity Mobile is not a primary service for Comcast
Xfinity Mobile sees wireless as a spoke on the wheel they must have to stabilize losses in their core broadband and cable TV services.
That’s why I don’t think Xfinity Mobile will ever be an innovative wireless leader. True, they will be a player and they will continue to build out their own network in order to reduce their costs and become more profitable.
This is a valid strategy for them. However, they must be judged differently from traditional wireless players whether they be carriers like AT&T, Verizon and T-Mobile, or smaller players like US Cellular and C-Spire Wireless, or MVNO resellers like Spectrum Mobile, Altice Mobile, Tracfone and many others.
Xfinity Mobile is a wireless player, and it will help Comcast, but it is not impacting the wireless industry or affecting other wireless carriers at this time.
