Comcast to Launch Wi-Fi Phone Service by Mid-2017, CEO Says

(Bloomberg) -- Comcast Corp. will introduce a Wi-Fi-based wireless service by the middle of next year, entering a market dominated by Verizon Communications Inc. and AT&T Inc.

The plan involves a hybrid cellular and Wi-Fi service using Verizon’s network and millions of the cable company’s Wi-Fi hotspots in peoples’ homes, Chief Executive Officer Brian Roberts said at a conference Tuesday.

The nation’s largest cable company is seeking new sources of revenue as consumers ditch traditional TV packages and other pay-TV providers like AT&T and Charter Communications Inc. get bigger through acquisitions. Comcast, which has tried and failed before to join the wireless fray, this time plans to take advantage of some 15 million Wi-Fi hotspots to challenge the big phone companies.

“There will be a big payback with reduced churn, more stickiness, better satisfaction,” Roberts said at the Goldman Sachs Communacopia conference in New York.

Last year, Comcast invoked a 2012 agreement with Verizon to resell the carrier’s wireless services. Under that accord, a consortium of cable companies led by Comcast sold nationwide spectrum licenses to Verizon for $3.6 billion and secured wireless-resale rights.

Wireless Ambitions

For its own part, Comcast has been testing technology that would let customers switch between Wi-Fi hot spots and cellular networks without losing connectivity. Over the past several years, Comcast has been replacing its cable customers’ routers with new ones doubling as public Wi-Fi hotspots.

Comcast is also among the potential bidders for wireless airwaves in a current federal auction. Acquiring spectrum would significantly boost Comcast’s wireless ambitions by making it easier for the company to build its own network. In July, Comcast promoted Greg Butz to a newly created position of president of Comcast Mobile. Butz now leads a team of more than 100 working on a wireless product, Roberts said. 

By adding a cellular service, the company can sell more products, Roberts said. “If that is a Verizon wireless product, maybe it’s improved with our 15 million hot spots where it’s more seamless,” he said.

Comcast will try to be the first successful cable mobile virtual network operator, or MVNO -- a concept pioneered by Virgin Mobile UK in 1999 in which a company buys capacity on other wireless carriers’ networks and resells services under its own brand. Such an approach could give way to Comcast’s seeking to acquire a wireless carrier such as T-Mobile US Inc., said Paul Sweeney, a Bloomberg Intelligence analyst. That way Comcast wouldn’t have to rent space on another carrier’s network to offer service.

“I don’t think this announcement precludes their possible future interest in T-Mobile,” the third-largest carrier behind Verizon and AT&T, Sweeney said in an e-mail. “Most investors wouldn’t be surprised to see Comcast pursue a multi-pronged strategy of developing an MVNO, acquiring additional spectrum, and pursuing an acquisition of an existing network provider.”

X1 Streaming

Separately, Roberts said Comcast customers can now subscribe to Netflix through the cable company’s X1 platform, and is currently in talks with other web-streaming services to be added to the portal. Such deals would move the company closer to its ultimate goal of delivering customers all of their entertainment options -- both on traditional cable TV and online-streaming services -- through their cable subscription.

To contact the reporter on this story: Gerry Smith in New York at gsmith233@bloomberg.net. To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net, Paul Barbagallo, Lisa Wolfson