NEW YORK -- Cable television provider Comcast will start selling cellphone plans called Xfinity Mobile in the coming months, using a network it's leasing from Verizon.
Comcast, which has nearly 25 million high-speed Internet customers, said Thursday that its wireless service is aimed at holding on to its customers. Comcast Cable's key competitors -- AT&T's DirecTV and Verizon's FiOS -- are part of companies with wireless offerings.
"We're not getting into the mobile business to be the No. 1 carrier," said Sam Schwartz, chief business development officer with Comcast Cable. "It's to benefit our existing core business. We're not going to make billions of dollars in profit."
Wireless service has become another hook into the customer and more reason for subscribers to stick around instead of switching to other providers.
"The more products you add, the lower the churn," said Greg Butz, president of Comcast Mobile, using the industry term for monthly subscriber defections. Comcast said it expects to have 250 stores, about half of its total, retooled to sell wireless service and phones by the end of the year. The remaining stores will be updated in the following years, the company said.
The best deals will go to Comcast's highest-tier customers, those who already spend roughly $140 a month with Comcast for Internet, video and wired phone services. A family of four could get unlimited data for $180 a month combined, the same as Verizon. Many customers won't qualify for the special pricing, though; for them, unlimited data for four lines will cost $260.
Individuals, however, would save on unlimited even without special pricing -- $65 a month for Comcast, compared with $80 for Verizon.
For customers who don't need a lot of cellular data, Comcast charges a flat rate of $12 per gigabyte of data, enough for about an hour of video but plenty for email and chats.
Comcast is waiving typical "access fees" of $20 per line that most carriers charge for enabling voice and text service; the waiver will cover up to five lines. So someone who uses no data would get free wireless service. A couple using four gigabytes a month would pay $48 at Comcast and $90 at Verizon.
For now, though, Comcast won't be rolling wireless charges onto the same bill as broadband, cable and other services.
"They are not at the very bottom of the market. I would describe [the prices] as low but reasonable," said Craig Moffett, a telecom analyst with research firm MoffettNathanson. "It signals that their ambition is to use this service to mitigate [cable TV] churn as opposed to as a stand-alone profit opportunity."
The service Comcast is selling will be essentially the same as a Verizon plan, though Comcast will reduce speeds on unlimited plans after 20 gigabytes. Verizon's threshold is higher, at 22 gigabytes, and reduced speeds apply only when there is network congestion.
Comcast will initially require customers to buy phones through the company. It's offering iPhones, Samsung Galaxy phones and one budget model from LG. Customers can pay in full upfront or in monthly installments, just as they would through a traditional carrier.
Comcast's pay-per-gigabyte approach is similar to what Google is doing with its wireless service, Google Fi. Customers don't need to guess ahead of time how much data they plan to use; both plans charge them only for what they use. With traditional carriers, unused data might get carried over to the next month; even if not, the customer still pays for the unused amount.
But Google Fi hasn't caught on, in part because it works with only a few Google-branded phones and uses networks from T-Mobile, Sprint and U.S. Cellular, which aren't as robust as Verizon's. Comcast said it can also take advantage of vast array of marketing channels for Internet and voice services.
The wireless market may soon get even more crowded. Charter Communications Inc., which has the same resale agreement with Verizon, plans to offer a wireless service in 2018. The company is still working out purchase contracts with phone-makers and determining whether its 700 stores nationwide can support an influx of consumers seeking wireless deals, Charter Chief Executive Officer Tom Rutledge said earlier this year.
Information for this article was contributed by Anick Jesdanun of The Associated Press, Gerry Smith and Scott Moritz of Bloomberg News and Bob Fernandez of The Philadelphia Inquirer.
Business on 04/07/2017