It probably won't surprise anyone reading this that I regularly scan the
news for any references to Comcast. Yesterday, Philly.com published an
article discussing Xfinity Mobile, Comcast's residential mobile phone
service for customers of Xfinity Internet. I've decided to repost it
here, since there have been a couple of messages regarding choosing a
cell phone plan. Although I'm posting this particular piece I am not
attempting to promote Xfinity products over other services and I would
have no problem posting an article that might discuss the benefits of a
competing product.
From philly.com
Is Comcast's Xfinity Mobile a good deal?
Christian Hetrick
12-15 minutes
Here’s something that may surprise you:
Switching to Comcast can save you money.
The cable and broadband giant, often criticized for its rising bills and
fees, has one of the best deals for cellphone service on the market — if
you don’t use a lot of data.
There are some caveats. You have to be an existing Comcast internet
customer to subscribe. And heavy use on multiple lines erases Comcast’s
advantage.
Xfinity Mobile, launched in May 2017, is a relatively new entrant to the
cell phone market and is avidly trying to build up the business as it
incurs substantial losses. It offers two options: a monthly $45-per-line
unlimited talk, text and data plan, and a pay-as-you-go plan for $12 per
gigabyte. Comcast also allows customers to mix and match plans on one
account, meaning parents can choose pay-as-you-go plans while signing up
their kids for unlimited data.
Comcast’s unlimited plan is the cheapest single-line offer compared to
the major wireless providers. Verizon, for example, charges $75 for a
single-line unlimited plan. AT&T and T-Mobile both bill $70, while
Sprint’s costs $60, according to offers on their websites.
Xfinity Mobile’s unlimited plan remains a bargain until several phones
are added. Sprint sells three unlimited lines for $120, compared with
$135 through Xfinity. At four unlimited lines, AT&T, Verizon and
T-Mobile all charge $160, while Xfinity will bill $180.
But Comcast officials say many consumers don’t need that much data.
Randall Hounsell, Comcast’s senior vice president of product and
marketing for Xfinity Mobile, said roughly 60 percent of smartphones use
less than five gigabytes of data, while a third use less than two gigabytes.
“In a family, there’s usually a couple devices in there that don’t need
unlimited,” Hounsell said. Giving consumers the flexibility to mix
unlimited with per-gigabyte plans is “our smart way of allowing families
to save,” he said.
Verizon does not allow account holders to have some lines on unlimited
data while others separately share a data plan. An AT&T spokesperson
said the company does give customers that option, but acknowledged that
such an offer “isn’t online anywhere.” T-Mobile offers only an unlimited
plan. Sprint’s website doesn’t mention a mix-and-match option and did
not respond to a request for comment.
Comcast customers can switch lines from a per-gigabyte plan to unlimited
data at any point during the month if they find themselves using more
data than expected. An Xfinity Mobile app allows users to track their
data usage and easily make changes to their account.
Xfinity’s $12 per gigabyte plan is also cheaper than the competition in
several instances. For example, a Comcast account using three gigabytes
of data per month would cost $36, less expensive than the $50 that AT&T
and Verizon would charge. Again, T-Mobile does not have a shared data
plan, so at a minimum you’d have to pay $70 for unlimited data. Sprint
sells two gigabytes for $40, but you’d need to buy the $60 unlimited
plan to reach three gigabytes.
There are cheaper data plans out there in some specific scenarios. For
example, AT&T sells five gigabytes for $50 while Xfinity bills $60, and
Verizon charges $70 for eight gigabytes compared to $96 through Xfinity.
But Comcast doesn’t charge access fees for up to five phones, while both
AT&T and Verizon impose $20 per phone access fees. When factoring in
those fees, Xfinity Mobile is still a better deal in those cases..
There are no contracts with Xfinity Mobile and no penalties for
canceling, though customers who pay for their phones in monthly
installments would have to clear their remaining balances upon quitting,
a Comcast spokesperson said.
Xfinity Mobile runs over Verizon’s wireless network under a 2011 deal
that lets Comcast resell Verizon’s wireless spectrum. Comcast is also
utilizing its 18 million WiFi hotspots, so consumers don’t always have
to burn through their cellular data.
Comcast’s move into the smartphone business is expected to cost the
company $1.2 billion during its first 18 months. Comcast added 196,000
smartphone subscribers during the first quarter of 2018 and lost $189
million on the business. Comcast executives have said Xfinity Mobile
will be profitable if the business gets larger.
As of April, Xfinity Mobile has 577,000 subscribers. The service is
available only to Comcast’s 26 million internet customers.
Walter Piecyk, a BTIG analyst who tracks the telecommunications
industry, said Comcast hasn’t dented the wireless market yet and would
need to add about 325,000 subscribers per quarter for the industry to
take notice.
“It’s interesting and certainly a compelling service for Comcast
customers, but they haven’t taken enough customers from existing
wireless operators to merit a competitive response to their actions,” he
said.
Piecyk described Comcast’s move into the wireless market as both an
offensive and defensive strategy. He said it helps the company hold onto
internet customers and prepare for how 5G mobile networks will enable
wireless competitors to encroach on the home internet business, while
also generating free cash flow once the company builds up its customer base.
“Comcast would not have to achieve much market share in order to realize
significant free cash flow from a successful wireless business,” he said.
Published: July 23, 2018 — 11:30 AM EDT
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