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Comcast Unveils Wireless Plan: Competition to Intensify
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Yesterday, Comcast Corp. (CMCSA - Free Report) , the largest cable MSO (multi service operator) and media giant, declared plans for its much-hyped wireless venture. The company’s wireless service will be launched in mid-2017 under the “Xfinity Mobile” brand.
Initially, Comcast will offer unlimited data and text plans only to the subscribers of the company’s high-speed broadband (Internet) and high-end X1 Internet and video package. The company will charge $45 for up to 5 lines for those who use bundled X1 package and $65 for those who only use its high-speed Internet. Customers can also choose to pay $12 per gigabyte each month.
Moreover, all major smartphone brands will be available through Xfinity Mobile including Apple, Samsung and LG. Depending on the customer and plan, Comcast expects its wireless service to bring annual savings ranging from above $150 to more than $550 per month over existing average wireless service costs.
Notably, in Oct 2015, Comcast had inked a deal with U.S. telecom behemoth Verizon Communications Inc. (VZ - Free Report) to become an MVNO (mobile virtual network operator) and offer wireless services. Its wireless service will be a hybrid product relying primarily on its WiFi hotspots, as it uses Verizon’s cellular network as a back-up to fill-in for areas lacking adequate WiFi coverage. At present, the company boasts an extensive public WiFi network consisting of nearly 16 million hotspots.
Earlier, Comcast stated a futurepossibility of the MVNO agreement being extended with Sprint Corp. (S - Free Report) and other wireless operators. Importantly, the company took part in the recently concluded 600 MHz low-band wireless spectrum auction conducted by the Federal Communications Commission.
Yesterday, Comcast clarified that its upcoming entry in the U.S, wireless market is not specifically related to making huge profit or gaining significant market share from incumbent carriers. Rather, the service will be primarily aimed to retain existing X1 pay-TV bundle subscribers by reducing churn rate.
Unlimited Data Plan War
Stiff pricing competition in the industry is a genuine concern. As we recently saw the four major wireless telecommunications companies – AT&T Inc. (T - Free Report) , Verizon, Sprint and T-Mobile US Inc. (TMUS - Free Report) – joined in the unlimited postpaid data plan war in order to stand out in the crowd.
T-Mobile US’ unlimited plan starts at $70 per month for a single line, while two lines are available for $100 a month. Verizon offers a single line of unlimited data for $80 a month with a second line costing $60 a month. AT&T's unlimited plan starts at $100 a month, but doesn’t include monthly taxes and fees. Verizon and AT&T do not include those fees in their advertised rates with the exception of T-Mobile US.
Sprint offers its unlimited plan of $50 a month for a single line, and from two to five lines for $90 a month. Any extra line will cost $40 each. These rates will remain effective till Mar 31, 2018. After that, Sprint will raise the prices back to normal rates, per which one line costs $60 a month, two lines cost $100 a month, and every line beyond that costs an additional $30 a month.
In this scenario, the entry of non-wireless giants like Comcast will further intensify wireless competition.
Price Performance of Comcast
Year-to-date the stock price of Comcast returned 10.44%, underperforming the Zacks categorized Cable TV industry’s gain of 14.21%. At present, cable TV industry is facing a massive cord-cutting threat and Comcast is no exception to the trend. We believe that is the primary reason behind the stock currently carrying a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Comcast Unveils Wireless Plan: Competition to Intensify
Yesterday, Comcast Corp. (CMCSA - Free Report) , the largest cable MSO (multi service operator) and media giant, declared plans for its much-hyped wireless venture. The company’s wireless service will be launched in mid-2017 under the “Xfinity Mobile” brand.
Initially, Comcast will offer unlimited data and text plans only to the subscribers of the company’s high-speed broadband (Internet) and high-end X1 Internet and video package. The company will charge $45 for up to 5 lines for those who use bundled X1 package and $65 for those who only use its high-speed Internet. Customers can also choose to pay $12 per gigabyte each month.
Moreover, all major smartphone brands will be available through Xfinity Mobile including Apple, Samsung and LG. Depending on the customer and plan, Comcast expects its wireless service to bring annual savings ranging from above $150 to more than $550 per month over existing average wireless service costs.
Notably, in Oct 2015, Comcast had inked a deal with U.S. telecom behemoth Verizon Communications Inc. (VZ - Free Report) to become an MVNO (mobile virtual network operator) and offer wireless services. Its wireless service will be a hybrid product relying primarily on its WiFi hotspots, as it uses Verizon’s cellular network as a back-up to fill-in for areas lacking adequate WiFi coverage. At present, the company boasts an extensive public WiFi network consisting of nearly 16 million hotspots.
Earlier, Comcast stated a futurepossibility of the MVNO agreement being extended with Sprint Corp. (S - Free Report) and other wireless operators. Importantly, the company took part in the recently concluded 600 MHz low-band wireless spectrum auction conducted by the Federal Communications Commission.
Yesterday, Comcast clarified that its upcoming entry in the U.S, wireless market is not specifically related to making huge profit or gaining significant market share from incumbent carriers. Rather, the service will be primarily aimed to retain existing X1 pay-TV bundle subscribers by reducing churn rate.
Unlimited Data Plan War
Stiff pricing competition in the industry is a genuine concern. As we recently saw the four major wireless telecommunications companies – AT&T Inc. (T - Free Report) , Verizon, Sprint and T-Mobile US Inc. (TMUS - Free Report) – joined in the unlimited postpaid data plan war in order to stand out in the crowd.
T-Mobile US’ unlimited plan starts at $70 per month for a single line, while two lines are available for $100 a month. Verizon offers a single line of unlimited data for $80 a month with a second line costing $60 a month. AT&T's unlimited plan starts at $100 a month, but doesn’t include monthly taxes and fees. Verizon and AT&T do not include those fees in their advertised rates with the exception of T-Mobile US.
Sprint offers its unlimited plan of $50 a month for a single line, and from two to five lines for $90 a month. Any extra line will cost $40 each. These rates will remain effective till Mar 31, 2018. After that, Sprint will raise the prices back to normal rates, per which one line costs $60 a month, two lines cost $100 a month, and every line beyond that costs an additional $30 a month.
In this scenario, the entry of non-wireless giants like Comcast will further intensify wireless competition.
Price Performance of Comcast
Year-to-date the stock price of Comcast returned 10.44%, underperforming the Zacks categorized Cable TV industry’s gain of 14.21%. At present, cable TV industry is facing a massive cord-cutting threat and Comcast is no exception to the trend. We believe that is the primary reason behind the stock currently carrying a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>