08
Apr
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The cellular network business is one of the most competitive in the world, but it's also one of the most lucrative, and it's only growing. That being the case, it's not surprising that American telecom giant Comcast may be looking into entering this hotly-contested market. According to a report on The Information, Comcast is hoping to use its huge userbase of home Internet customers to create a combination Wi-Fi and cellular network, competing directly with carriers like AT&T, Verizon, Sprint, and T-Mobile.

Amir Efrati reports:

Comcast officials recently told people outside the company that it was considering a mobile phone service, which would rely on a combination of Wi-Fi and leased capacity on cellular networks... A recent report by New Street Research estimated that U.S. cable companies could price Wi-Fi-based mobile phone service at a 25% discount to existing wireless carriers and still generate profit margins well north of 30%.

Those who keep up with the wireless industry know that this hybrid Wi-Fi + cellular system already has at least one adherent in the US: Republic Wireless. The small independent carrier uses Wi-Fi networks for both calls and data when available, then switches to airwaves leased from Sprint when the user is outside of Wi-Fi range, and offers rates well below the norm for cellular service. Comcast could do something similar, especially if it targeted its own home and business Internet customers, essentially getting them to pay a little extra to leave conventional cellular providers and use Comcast as a Mobile Virtual Network Operator (MVNO) when out of Wi-Fi range. Comcast also owns over a million public Wi-Fi hotspots that could be used in the same manner.

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But Republic Wireless is a startup, and poses no real threat to the Big Four wireless carriers at the moment. Comcast is the largest cable Internet provider in the United States, and while it's not quite the industrial giant that AT&T and Verizon are, it could offer rates well below those paid by current cellular customers. According to The Information, a Cisco report states that 57% of all data sent to mobile devices was already going over conventional Wi-Fi networks last year. Combine that with the usual bundling system of home phone, Internet, and television service, and you've got a potent potential for profit.

So why would any self-interested cellular network agree to undercut its own business model by leasing phone and data traffic to Comcast? At least one of them may already have done so: Comcast and some of its cable contemporaries have already given up some wireless spectrum for the right to low-cost access to Verizon Wireless airwaves.

Three years ago, Comcast, Time Warner Cable and Cox Communications—the nation’s three largest cable operators—reached a deal with Verizon Wireless to give up control of certain airwaves in exchange for the right to buy access to Verizon’s network at wholesale prices. The deal allows the cable companies to lease space on Verizon’s 4G network to handle any traffic that isn’t carried by their Wi-Fi networks.

If Comcast wants to enter the wireless business, it may have to leap over more than technical hurdles. Comcast isn't a popular company to begin with, thanks to the semi-monopolized way that cable Internet companies control exclusive territories in US cities. And its current efforts to buy competitor Time Warner Cable for $45 billion has made it a possible target for a regulatory block - the deal will go before a Senate Judiciary hearing tomorrow, and it could still be shut down by the Justice Department.

Comcast would enter the wireless market as a new competitor, so there probably wouldn't be any significant regulatory issues. That said, the company already has its hands in both the content (it owns NBC Universal) and delivery cookies jars. Competing directly with mobile networks, which themselves aren't exactly regarded as pro-consumer, would make a lot of people uncomfortable.

Source: The Information

Michael Crider
Michael is a native Texan and a former graphic designer. He's been covering technology in general and Android in particular since 2011. His interests include folk music, football, science fiction, and salsa verde, in no particular order.

  • http://mrmcpowned.com mrmcpowned

    It appears Comcast also won their second WCIA award today: http://consumerist.com/2014/04/08/congratulations-to-comcast-your-2014-worst-company-in-america/

    Also you mixed up "the" and "carriers" in "competing directly with the carriers like of" ;)

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  • Chris

    If it's anything like their Internet, expect terrible customer support, frequently dropped phone calls, and massive amounts of packet loss.

    • hp420

      They're not the worst company in the country for nothing, and they refuse to lose that title any time soon!!

    • Mike Harris

      The only silver lining is that because of Comcast's greed, they'll probably charge just as much as the existing carriers, therefore ruining any chance of gaining significant market share.

      I hope a battery explodes in their face and they die from the combination of pressurized flammable electrolyte and Febreeze.

      • Jeff Weatherup

        I understood that reference...Fantastic!

  • abqnm

    As if the public wifi enabled consumer routers weren't enough, now Comcast users may have to share their home bandwidth with mobile users as well? I know it is technically not sharing bandwidth from your plan, but it is still slowing down the already congested Comcast network and clogging up the wifi spectrum. Yay...

    • Doakie

      Man, could you imagine if they released updated Cable Modems that all acted like AirRaves whenever a cell phone was near them? They serve so many customers cable internet and if everywhere you go you automatically jumped on someone's modem whenever you were in range they might actually have a significant network right off the bat without having tower coverage. Especially in downtown areas, apartment buildings, and condos. Sounds genius to me. But I wouldn't pay more than 40% of what I pay to AT&T monthly because I wouldn't want to be locked down to their devices only. GSM FAN, BABY! I love swappin SIMs!

      • abqnm

        That is basically what they are trying to do, from what the stories say, that is. Comcast is already shipping wireless router/modem combos to people that have a built in public Comcast wifi Hotspot, so it wouldn't be that difficult to add cell phones to the mix. For the wireless user, this sounds great, but for the home Internet subscriber, not so much. Think about how slow the network gets already at peak times and then add an unknown number of cell users to you modem, who all have to share bandwith with the rest of the neighborhood. And this isn't even taking in to account the additional wifi spectrum congestion that will occur when you have all these mobile users attached to your modem.

        Overall it sounds good in theory, but if their current network is an indicator, it may not work as well as planned. Then again, it could drive Comcast to seriously upgrade their infrastructure which could improve service for all customers, wired and wireless.

    • hp420

      You know you can just get a standalone modem and use your own router, right? I don't know why anyone would trust a router that comes from the ISP anyway.

      • abqnm

        I do, but most average consumers would have no idea. I had my own modem when I was with Comcast, but that was before they started this program anyway.

  • hp420

    What the hell is wrong with them? They were just voted worst company in America, and immediately they make a bid for Time Warner and try to expand their terrible services??? Someone please put these assholes out to pasture, already!!

    • ProductFRED

      To be fair this has been in the process for months, not just now. But yeah, I agree.