Comcast Plans to Enter Cellphone Market

Recently, Comcast notified Verizon that it wants to start providing cellphone services. According to a source, it intends to exercise its option to resell cellular service using the carrier’s network. A couple of years back, Comcast and various other cable operators had the chance to join Verizon. Last week Verizon confirmed in a conference that at least one of the cable companies is exercising its options to tap its network. 

Verizon CFO Fran Shammo said on a call “We have an existing [cellular service] agreement and we were informed that they are going to execute on that agreement.” One of the major questions that arises is whether the company is going to revise the year old deal which was drafted earlier, even before data became a more crucial part than voice calls and texts. 

“I am not going to get into whether we are discussing revising the agreement or the terms and conditions of that since it’s under NDA and we will see how this plays out,” Shammo said. “Obviously, the industry is moving. Cable is going to do what they are going to do and we’re going to do what we’re going to do.” He also announced that Wi-F is not at all a replacement for the high-speed cellular network. The Comcast representative declined to expand Shammo’s remarks when asked about the company’s plans and thoughts.

“We don’t know exactly when and how (because they don’t know exactly when and how), but they will launch a wireless offering in due course,” Chaplin told Re/code in an e-mail interview. Chaplin said that he expects a Comcast wireless service could begin six months after the company notified Verizon, with a commercial service potentially in place within a year.

If it somehow managed to enter the cellphone market, Comcast will firstly rely on its large Wi-Fi network. Verizon is not just relying on Comcast. The company has plenty of other options to resell service from the Sprint network. 

Chaplin is afraid that Comcast may overpower some of the major carriers including T-Mobile US. “We would guess that Comcast will test a Wi-Fi first offering, first using Verizon and see how it performs,” Chaplin said. “Before rolling it out commercially I would assume they will see if they can get a better deal out of T-Mobile and Sprint, similar to Google’s (Fi service). At the same time, we wouldn’t be surprised if they take a hard look at buying T-Mobile.”