Comcast may be one step closer to becoming a cellular service provider. Sources familiar with the matter claim the nation’s largest cable company has told Verizon – the nation’s largest wireless provider – that it intends to resell access to the carrier’s wireless network as a mobile virtual network operator (MVNO).
Comcast earned the right to do so as part of a $3.6 billion spectrum licensing deal that both parties participated in back in 2011.
Verizon CFO Francis Shammo hinted at the matter earlier this week during his company’s earnings call, saying that cable is going to do what they’re going to do and Verizon will do what it’s going to do.
Shammo didn’t exactly seem thrilled about the idea although considering the 2011 agreement, his hands are more or less tied. Jonathan Chaplin, an analyst with New Street Research LLC, said in a note earlier this week that Comcast entering the wireless industry would be bad for carriers – perhaps with the exception of T-Mobile – and good for cable.
Comcast could begin market trials within six months, Chaplin added, and have a commercial service ready by this time next year.
Sources tell Bloomberg that Comcast plans to offer a hybrid service that would lean on the company’s expansive network of Wi-Fi hotspots and use Verizon’s cellular network to fill in the gaps in coverage. Chaplin said that because of Comcast’s extensive Wi-Fi network, it could afford to offer plans starting around $25 to $30 per month which is roughly half the price of a typical wireless plan.
Comcast is reportedly still on the fence regarding the move. Perhaps the bigger question is, how many people would be willing to sign up for wireless service from Comcast given the company’s reputation in the cable industry.